This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the third quarter of 2020.
For a similar post from Q1 2020 see here, for Q2 2020 see here.
DOJ Enforcement (Corporate)
The DOJ brought two corporate FCPA enforcement action in the third quarter. Actual DOJ recovery in these actions was approximately $72 million.
Herbalife (August 28th)
See here, here, here and here for prior posts.
Charges: Criminal information charging one count of conspiracy to violate the FCPA’s books and records provisions
Resolution Vehicle: Deferred Prosecution Agreement
Guidelines Range: $74.3 million – $148.6 million
Settlement: $55.7 million
Origin: The company previously disclosed: “The SEC has requested from the Company documents and other information relating to the Company’s anti-corruption compliance in China and the Company is conducting its own review. The Company has discussed the SEC’s investigation and the Company’s review with the Department of Justice. The company is cooperating with the SEC’s investigation and cannot predict the eventual scope, duration, or outcome of the matter at this time.”
Monitor: No
Individuals Charged: Yes
Sargeant Marine (Sept. 22)
See here and here for prior posts.
Charges: Criminal information charging one count of conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: Plea Agreement
Guidelines Range: $$120 million – $240 million.
Settlement: $90 million reduced to $16.6 million based on inability to pay
Origin: Unclear
Monitor: No
Individuals Charged: Yes
DOJ Enforcement (Individual)
The DOJ brought or announced three core enforcement actions involving 8 individuals in the third quarter.
As highlighted here, the DOJ returned to a Ugandan adoption bribery scheme to bring additional charges against Dorah Mirembe and Debra Parris.
As highlighted here, the DOJ announced that Javier Aquilar was criminally charged in connection with an alleged Ecuador bribery scheme.
As discussed here, the DOJ announced criminal FCPA charges and pleas against the following individuals connected to the Sargeant Marine enforcement action: Daniel Sargeant, Jose Meneses, Luis Andrade, Roberto Finocchi, David Diaz.
SEC Enforcement (Corporate)
The SEC brought three corporate FCPA enforcement action in the third quarter. SEC recovery in these actions was approximately $111 million.
Alexion Pharmaceuticals (July 2)
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: $21.5 million ($14.2 million in disgorgement, $3.7 million in prejudgment interest, and a $3.5 million civil penalty
Origin: The company previously disclosed a May 2015 subpoena from the SEC and an October 2015 voluntary request for information from the DOJ
Individuals Charged: No
Related DOJ Enforcement Action: No
World Acceptance Corp (Aug. 6)
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: $21.7 million ($17.8 million in disgorgement, $1.9 million in prejudgment interest, and a $2 million civil penalty)
Origin: Voluntary disclosure
Individuals Charged: No
Related DOJ Enforcement Action: No
Herbalife (Aug. 28)
See here, here, here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: $67.3 million (approximately $58.7 million in disgorgement and approximately $8.6 million in prejudgment interest)
Origin: The company previously disclosed: “The SEC has requested from the Company documents and other information relating to the Company’s anti-corruption compliance in China and the Company is conducting its own review. The Company has discussed the SEC’s investigation and the Company’s review with the Department of Justice. The company is cooperating with the SEC’s investigation and cannot predict the eventual scope, duration, or outcome of the matter at this time.”
Individuals Charged: Yes
Related DOJ Enforcement Action: Yes
SEC Enforcement (Individual)
The SEC did not bring or announce any individual FCPA enforcement actions in the third quarter.
Other Developments or Items of Interest
As highlighted here, the DOJ and SEC quietly released a Second Edition of the FCPA Guidance (first released in 2012) and this post provides some big picture reflections on the Second Edition. As highlighted here, the Second Edition of the Guidance (like the first) contains several false statements and is full of selective information and half-truths. Even though a close read of the FCPA Guidance indicates that there are FCPA enforcement actions not in the public domain, this post highlights how the DOJ refused to provide information about its secret FCPA enforcement actions. This post highlights several common sense statements in the Second Edition and also provides commentary. Curious as to why the DOJ/SEC released the original FCPA Guidance in 2012? This post provides the backstory.
As highlighted here, for the first time in six years the DOJ issued an FCPA opinion release.
As highlighted here and here, Attorney General William Barr and SEC Division of Enforcement Director Stephanie Avakian gave FCPA relevant speeches.
As discussed in this post, the Office of Management and Budget released “best practices” for “fairness in administrative enforcement and adjudication” relevant to the SEC’s enforcement of the FCPA.
