This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the second quarter of 2023. (See here for a similar post from Q1).
DOJ Enforcement (Corporate)
The DOJ did not announce any corporate FCPA enforcement actions in the second quarter.
DOJ Enforcement (Individual)
The DOJ did not announce any individual FCPA enforcement actions in the second quarter.
SEC Enforcement (Corporate)
The SEC brought three corporate FCPA enforcement action in the second quarter. SEC recovery in these actions was approximately $73 million.
Frank’s International (April 26)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s anti-bribery, books and records, and internal controls provisions)
Settlement: Approximately $8 million (disgorgement of $4,176,858 and prejudgment interest of $821,863 and a civil money penalty in the amount of $3,000,000).
Origin: The company previously disclosed: “The Company is conducting an internal investigation of the operations of certain of its foreign subsidiaries in West Africa including possible violations of the U.S. Foreign Corrupt Practices Act, the Company’s policies and other applicable laws. In June 2016, the Company voluntarily disclosed the existence of its extensive internal review to the U.S. Securities and Exchange Commission and the United States Department of Justice.”
Individuals Charged: No
Related DOJ Enforcement Action: No
Philips (May 11)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: Approximately $62.2 million (disgorgement of $41,126,170, prejudgment interest of $6,047,633, and a civil monetary penalty of $15,000,000).
Origin: Unclear from the resolution document. In 2019, media reports stated: ““The U.S. Securities and Exchange Commission is investigating Siemens AG, Philips NV and General Electric Co for allegedly using local middlemen to negotiate bribes with Chinese government and hospital officials to sell medical equipment. The investigations into the companies’ business in China, along with an existing SEC probe into their sales in Brazil, are part of a new effort by U.S. regulators to crack down on alleged corruption in sales of costly medical equipment worldwide […] Siemens, GE and Philips all denied wrongdoing and said they were unaware of any SEC investigation concerning their operations in China.”
Individuals Charged: No
Related DOJ Enforcement Action: No
Gartner (May 26)
See here and here for the prior posts.
Charges: None (administrative order findings violations of the FCPA’s anti-bribery, books and records. and internal controls provisions)
Settlement: Approximately $2.5 million ($856,764 in disgorgement and prejudgment interest and a $1.6 million civil penalty).
Origin: The company previously disclosed: “During the second half of 2018 we fully cooperated with a South African government commission established to review a wide range of issues related to the country’s revenue service, including the procurement and fulfillment of consulting agreements we entered into with the revenue service through a sales agent from late 2014 through early 2017. In parallel, we commenced an internal investigation regarding this matter. We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018.” The SEC’s order stated: “In determining to accept the Offer, the Commission considered Gartner’s self disclosure following press reports in South Africa …”.
Individuals Charged: No
Related DOJ Enforcement Action: No
SEC Enforcement (Individual)
The SEC did not bring any individual FCPA enforcement actions in the second quarter. The SEC has not brought an individual FCPA enforcement action since October 2020.
Other Developments or Items of Interest
As highlighted here, a court granted the DOJ’s request to sever FCPA counts added to the financial fraud enforcement action against Samuel Bankman-Fried.
As highlighted here, in dismissing FCPA (and related) charges against Paulo Casqueiro Murta a judge found bad faith by the government and that the “government’s words and conduct breached the wall of credibility.”
As highlighted here and here, in recent months the Supreme Court has bench slapped the DOJ three times in rejecting overly expansive interpretations of a criminal statute by the DOJ.
As highlighted here, the SEC’s $279 million whistleblower award was reportedly made in connection with the Ericsson FCPA matter – even though the information provided by the whistleblower to the SEC occurred after the SEC had already opened an investigation of Ericsson. In other news involving Ericsson, as highlighted here an FCPA related securities fraud action against Ericsson was recently dismissed.
As highlighted here, Cary Yan was sentenced to 3.5 years in connection with the Marshall Islands bribery scheme he pleaded guilty to.
As highlighted here, in a domestic bribery criminal trial, former ComEd executives and associates were convicted of FCPA books and records and internal controls charges.
