This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the third quarter of 2017. (See here for a similar post for the first quarter of 2017 and here for the second quarter of 2017).
DOJ Enforcement (Corporate)
The DOJ brought one corporate FCPA enforcement action in the third quarter. DOJ recovery in this enforcement action was approximately $275 million (after accounting for various credits and deductions for contemplated related foreign law enforcement actions). This action has not resulted (at least yet) in any related DOJ individual FCPA enforcement actions.
Telia (Sept. 21st)
See here and here for prior posts
Charges: Criminal information as to Coscom LLC charging conspiracy to violate the FCPA’s anti-bribery provisions; criminal information as to Telia charging conspiracy to violate the FCPA’s anti-bribery provisions
Resolution Vehicle: As to Coscom, plea agreement; as to Telia deferred prosecution agreement
Guidelines Range: $731.4 million to $1.46 billion.
Settlement: $548.6 million reduced to approximately $275 million after accounting for various credits and deductions for contemplated Swedish and Dutch enforcement actions
Origin: Foreign media reporting
Monitor: No
Individuals Charged by DOJ: No
DOJ Enforcement (Individual)
The DOJ brought one individual FCPA enforcement action in third quarter. As highlighted here, the DOJ announced that Joseph Baptiste was criminally charged “for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti.”
SEC Enforcement (Corporate)
The SEC brought three corporate FCPA enforcement actions in the third quarter. SEC recovery in these enforcement actions was approximately $242 million (after accounting for various credits and deductions for contemplated related foreign law enforcement actions). Only one these enforcement actions has resulted (at least yet) in any related SEC individual FCPA enforcement actions.
Alere (Sept. 28th)
See here for a prior post
Charges: None. Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions. (In addition, the order found violations of other securities law provisions related to revenue recognition and other related practices)
Settlement: Approximately $13 million ($9.2 million civil monetary penalty, disgorgement of $3,328,689, and prejudgment interest of $495,196). The FCPA component of the Alere enforcement action appears to be approximately $3.8 million ($3.3 million in disgorgement and $.5 million in prejudgment interest) and will be recorded as such in FCPA enforcement statistics
Origin: SEC subpoena
Individuals Charged: No
Related DOJ Enforcement Action: No
Telia (Sept. 21st)
See here and here for prior posts
Charges: None. Administrative cease and desist order finding violations of FCPA’s anti-bribery provisions and books and records provisions
Settlement: $457 million in disgorgement reduced to $208 million after accounting for various credits and deductions including for contemplated Swedish and Dutch enforcement actions
Origin: Foreign media reporting
Individuals Charged: No
Related DOJ Enforcement Action: Yes
Halliburton (July 27th)
See here and here for prior posts
Charges: None. Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions
Settlement: $29.2 million
Origin: Based on the company’s previous disclosures – voluntary disclosure (although the SEC’s order is silent on this topic).
Individuals Charged: Yes
Related DOJ Enforcement Action: No
SEC Enforcement (Individual)
The SEC brought one individual FCPA enforcement action in the third quarter. As highlighted here, in connection with the Halliburton enforcement action the SEC also found that Jeannot Lorenz (Halliburton’s former vice president) causing the company’s violations, circumvented internal accounting controls, and falsified books and records. Without admitting or denying the SEC’s findings, Lorenz agreed to pay a $75,000 penalty.
Other Developments or Items of Interest
September
As highlighted in this post, Deputy Attorney General Rod Rosenstein signaled that change is once again coming to DOJ policy regarding corporate prosecutions. An irony is that this announcement occurred in connection with a speech on the rule of law. Indeed, a few days later, Rosenstein delivered another rule of law speech in which he stated: “The term ‘rule of law’ refers to the principle that the United States is governed by law and not arbitrary decisions of government officials. Rule of law systems are characterized by consistency and predictability.” Yet actions speak louder than words and this post encourages you to think whether much of FCPA enforcement is even consistent with rule of law principles.
August
The SEC is rarely put to its burden of proof in FCPA enforcement actions (corporate or individual). However, as highlighted here motions to dismiss were recently filed in the SEC’s FCPA enforcement action against former Och-Ziff executives Michael Cohen and Vanja Baros (which alleges the same core conduct as the DOJ and SEC’s September 2016 enforcement action against Och-Ziff). This post highlights previously decided cases relevant to the issues in dispute.
This post mulls over recent remarks by Sandra Moser (Principal Deputy Chief, Fraud Section, DOJ) and provides commentary on the following issues: how best to incentivize compliance, the U.S. “piling” on foreign law enforcement actions, individual accountability, DOJ transparency in resolving FCPA enforcement actions, and the DOJ’s FCPA Pilot Program.
July
As highlighted here, for the first time in six years the DOJ prevailed in a contested FCPA proceeding when put to its ultimate burden of proof as a federal jury convicted Ng Lap Seng of FCPA and other counts for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau.
As highlighted here, Acting Assistant Attorney General Blanco talked about foreign law enforcement cooperation in bribery and corruption investigations.
This post goes in-depth into the Second Circuit’s recent decision holding that a “Monitor’s Report is not a judicial document because it is not now relevant to the performance of the judicial function.”
Up north, a Canadian court issued the first ever appellate court decision construing Canada’s FCPA-like law, the Corruption of Foreign Public Official Act.
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