Remember when settlement amounts in a Foreign Corrupt Practices Act enforcement action were simple and straight forward?
For instance, the 2008 FCPA enforcement action against Siemens was a “blockbuster” at the time.
Like many recent FCPA enforcement actions, there were lots of moving parts in the Siemens enforcement action: a DOJ matter, an SEC matter, and related foreign law enforcement matters.
Yet, somehow the DOJ was able to articulate the actual settlement amount with seven words and a number: “a criminal fine in the amount of $448,500,000.”
Compare this to the recent SAP enforcement action in which it took the DOJ multiple paragraphs to articulate the actual settlement amount – and even then – it might take many people multiple reads of the multiple paragraphs to understand the language – and many people might still be confused:
“The Fraud Section and the Office and the Company agree, based on the application of the Sentencing Guidelines, that the appropriate criminal penalty is $118,800,000 (the “Criminal Penalty”). This reflects a 40 percent discount off the 10th percentile of the Sentencing Guidelines fine range.
The Company and the Fraud Section and the Office agree that the Company will pay a monetary penalty in the amount of $63,590,859, equal to approximately fifty-four percent of the Criminal Penalty ($63,700,000), reduced by $109,141 under the Criminal Division’s Pilot Program Regarding Compensation Incentives and Clawbacks, to the United States Treasury … The Fraud Section and the Office agree to credit toward the Criminal Penalty the amount paid by the Company to authorities in South Africa for violations of South African law related to the same conduct described in the Statement of Facts, up to a maximum of $55,100,000 (the “Penalty Credit Amount”), within twelve months of the execution of this Agreement.”
[…]
“The Company hereby admits …. that at least $103,396,765, representing the proceeds traceable to the commission of the offense, is forfeitable to the United States (the “Forfeiture Amount”).”
[…]
The Fraud Section and the Office agree to credit toward the Forfeiture Amount any proceeds traceable to the commission of the offense that are disgorged by the Company to the SEC and South African authorities, including repayments to customers of any of the transactions listed in the Statement of Facts, up to a maximum amount of $103,396,765 (the “Forfeiture Credit Amount”). Should any amount of the Forfeiture Credit Amount not be paid to the SEC and South African authorities and in connection with the Company’s resolutions with those authorities within twelve months of the execution of this Agreement, the Company agrees that it shall make a payment of any remaining unpaid portion of the Forfeiture Credit Amount by wire transfer pursuant to instructions provided by the Fraud Section and the Office no later than 10 business days after one year from the date of the Agreement.”
Likewise, in the recent Albemarle enforcement action the DOJ dished up the following word salad:
“[The DOJ has] determined that the appropriate resolution of this case is a non-prosecution agreement with the Company; payment by the Company in the amount of a $98,236,547 criminal monetary penalty, which reflects a discount of 45 percent off the bottom of the otherwise-applicable U.S. Sentencing Guidelines fine range and an additional discount of $763,453 under the Pilot Program, and $98,511,669 in forfeiture, which […] will be credited, in large part, against disgorgement of ill-gotten profits that the Company pays to the SEC in a concurrent resolution.”
[…]
The Company agrees to pay a monetary penalty in the amount of $98,236,547 to the United States Treasury no later than ten business days after the Agreement is fully executed. The Company further agrees that, as a result of the Company’s conduct, including the conduct set forth in the attached Statement of Facts, the Offices could institute a civil and/or criminal forfeiture action against certain funds held by the Company and that such funds would be forfeitable to the United States.”
[…]
[The DOJ agrees] that illicit proceeds disgorged by the Company in connection with the concurrent resolution with the SEC shall be credited against the Forfeiture Amount in the amount of $81,856,863 (the “Forfeiture Credit Amount”).
The Company agrees to pay $16,654,806, i.e., the Forfeiture Amount less the Forfeiture Credit Amount, to the United States Treasury no later than ten business days after the Agreement is fully executed, provided that the Company pays the Forfeiture Credit Amount to the SEC in connection with the Company’s concurrent resolution with the SEC.”
As we age, we tend to get nostalgic about the past.
And so it is with me and FCPA settlement amounts.
