This prior post went in-depth into the recent Eni enforcement action and this post continues the analysis by highlighting additional issues to consider.
Timeline
As stated in Eni’s recent disclosure: “In 2012, Eni contacted the U.S. Department of Justice (DoJ) and the U.S. SEC in order to voluntarily inform them about this matter, and has kept them informed about the developments in the Italian Prosecutors’ investigations and proceedings. Following Eni’s notification, both the U.S. SEC and the DoJ started their own investigations regarding this matter.”
Thus, from start to finish Eni’s FCPA scrutiny lasted an unconscionable 8 years. I’ve said it numerous times and will continue saying it until the cows come home, if the SEC wants its FCPA enforcement program to be viewed as credible and effective, it must resolve instances of FCPA scrutiny much quicker.
It’s a Bit Odd
There is a difference between proving criminal bribery charges and resolving civil books and records and internal controls violations without admitting or denying the SEC’s findings.
Nevertheless, it is a bit odd that an Italian court (Eni’s home jurisdiction) acquitted the company of the crime of international corruption for the same general conduct alleged in the SEC enforcement action.
Statute of Limitations
Pardon me for being that guy, but the April 2020 enforcement action against Eni was based on conduct that occurred between 2007 and 2010 (in other words 10-13 years prior to the enforcement action).
The statue of limitations for violations of the FCPA’s books and records and internal controls provisions is five years. But then again, statute of limitations matter little when a company agrees to toll or waive statute of limitations offenses to demonstrate its cooperation.
No-Charged Bribery Disgorgement
The Eni enforcement action represents yet another so-called “no-charged bribery disgorgement action.”
In other words, the $24.5 million settlement amount consisted entirely of disgorgement (and associated prejudgment interest) even though the SEC only found violations of the FCPA’s books and records and internal controls provisions.
As highlighted in this previous post (and numerous prior posts thereafter), no-charged bribery disgorgement is troubling. Among others, Paul Berger (here) (a former Associate Director of the SEC Division of Enforcement) has stated that “settlements invoking disgorgement but charging no primary anti-bribery violations push the law’s boundaries, as disgorgement is predicated on the common-sense notion that an actual, jurisdictionally-cognizable bribe was paid to procure the revenue identified by the SEC in its complaint.” Berger noted that such “no-charged bribery disgorgement settlements appear designed to inflict punishment rather than achieve the goals of equity.”
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