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Reading Assignment For All Executive Officers: The Mace Enforcement Action

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The recent Foreign Corrupt Practices Act enforcement action against Anthony Mace (the former CEO of SBM Offshore) is a must read

FCPA lawyers should send this post to their clients. In-house counsel and other compliance professionals should send this post to their executive officers and the Mace enforcement action should make its way into FCPA training and communications.

For starters, criminal FCPA enforcement actions against large company employees are unusual. (As highlighted in this prior post, the vast majority of individual criminal FCPA enforcement actions are against persons associated with small, privately held business organizations).

Criminal FCPA enforcement actions against high-level executives are even more unusual. (The vast majority of individual criminal FCPA enforcement actions are against sales employees and agents).

Criminal FCPA enforcement actions against high-level executives based on schemes devised before the executive assumed their position in which the executive acted with reckless disregard / conscious avoidance are even more unusual.

Yet, these were the salient features of the Mace enforcement action.

  • Beginning in or around 1996, before Mace become CEO, SBM Offshore, its U.S. subsidiary, and others including certain intermediaries entered into an agreement to pay bribes to foreign officials, including officials at Petrobras, Sonangol and GEPetrol, in order to obtain or retain business for SBM Offshore in violation of the FCPA.
  • In April 2008, Mace become CEO of SBM Offshore. As CEO, Mace held oversight authority over the entire company, including its Marketing and Sales Department. Further, Mace was required to personally approve payments exceeding a certain dollar amount, including those made to outside sales agents.
  • At the time Mace became CEO, he was aware that paying bribe to foreign officials was a crime under the FCPA and that SBM Offshore was operating in countries with a high risk of corruption.
  • Despite this, Mace joined the conspiracy by continuing to make payments that furthered the bribery scheme and deliberately avoided learning that certain payments, including payments Mace authorized and approved, were in fact bribes paid to foreign officials. Mace’s deliberate avoidance was solely and entirely due to his own actions and decisions.

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