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Issues To Consider From The Tysers And H.W. Wood Enforcement Actions

Issues

This previous post discussed the related DOJ Foreign Corrupt Practices Act enforcement actions against United Kingdom reinsurance brokers Tysers Insurance Brokers Limited (acquired by AUB Group in 2022) and H.W. Wood Limited for “participation in a corrupt scheme to pay bribes to Ecuadorian government officials.”

This post highlights additional issues to consider.

Timeline

AUB previously disclosed in 2022.

“AUB is aware that the United Kingdom’s Serious Fraud Office (SFO) has an ongoing investigation into suspicions of bribery and corruption in relation to the conduct of business in Ecuador between 2013 and 2017 by Integro Insurance Brokers Limited, its employees, agents and associated persons, and also into any associated money laundering, and that the U.S. Department of Justice (DOJ) also has an ongoing investigation in relation to this conduct. Integro Insurance Brokers Limited is a company within the Tysers group. AUB understands Tysers was notified by the SFO and DOJ of the investigations in May 2020 and October 2020 respectively and that Tysers has been cooperating with the SFO and DOJ since being notified. AUB further understands that Tysers has responded to a number of requests for information and documents, but neither the SFO nor DOJ has communicated its view of the likely outcome of the case or timeline for resolving these matters.”

Thus, from start to finish, Tysers FCPA scrutiny lasted approximately three years.

I’ve said it many times, and will continue saying it until the cows come home: if the DOJ/SEC want their FCPA enforcement programs to be viewed as more credible and more effective, the enforcement agencies must resolve instances of FCPA scrutiny much quicker.

This is particularly true in the Tysers matter given that the company, in the words of the DOJ, received credit for its cooperation by, among other things:

“(i) meeting the Fraud Section’s requests promptly; (ii) making foreign-based employees available for interviews; (iii) collecting and producing voluminous relevant documents to the Fraud Section, including documents located outside the United States; (iv) making several detailed factual presentations to the Fraud Section and conducting and producing financial analyses of voluminous transactions; and (v) timely accepting responsibility and reaching a prompt resolution.”

What About the U.K.?

When a U.K. company allegedly bribes officials in Ecuador one might expect the U.K. Serious Fraud Office to bring an enforcement action.

However, AUB group previously disclosed:

“the UK Serious Fraud Office has communicated that it has decided not to take any action against Integro Insurance Brokers Limited/Tysers in respect of the alleged conduct.”

Interesting then that the DOJ still proceed with an action.

The conspiracy charge against Tysers and H.W. Wood invoked the so-called 78dd-3 prong of the FCPA which has, as a jurisdictional element, “while in the territory of the United States, corruptly to make use of the mails or any means or instrumentality of interstate commerce or to do any other act in furtherance of” a bribery scheme.”

While the information does allege conduct in the U.S. by various co-conspirators – there is no specific mention of any conduct in the U.S. by Tysers and the only U.S. conduct alleged by H.W. Wood is that an H.W. Wood employee had his picture taken with a co-conspirator in Florida and the co-conspirator texted the picture to another co-conspirator about getting new business for H.W. Wood.

Next Up?

Interactions with Ecuador’s Seguros Sucre, an alleged state owned insurance company, have already resulted in three FCPA enforcement actions (Tysers and H.W. Wood – and previously Jardine Lloyd Thompson Group Holdings).

Might there be a fourth?

The most recent quarterly filing of Illinois based Arthur J. Gallagher & Co. states:

“During third quarter 2022, we received a subpoena from the FCPA Unit of the U.S. Department of Justice seeking information related to our insurance business with public entities in Ecuador. We continue to fully cooperate with the investigation.”

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