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Scrutiny Alerts And Updates

scrutiny alert

This post highlights scrutiny alerts and updates regarding ABB Ltd. and former Florida congressman David Rivera.

ABB

As highlighted in this prior post, in early 2017  it was reported that ABB (a Swiss-based power and automation technology company) was cooperating with law enforcement authorities in the U.S. and the U.K. following a voluntary disclosure regarding its past dealings with Unaoil.

In this April 28th filing, ABB disclosed:

“As a result of an internal investigation, the Company self-reported to the Securities and Exchange Commission (SEC) and the Department of Justice (DoJ) in the United States as well as to the Serious Fraud Office (SFO) in the United Kingdom concerning certain of its past dealings with Unaoil and its subsidiaries, including alleged improper payments made by these entities to third parties. The SFO has commenced an investigation into this matter. The Company is cooperating fully with the authorities. At this time, it is not possible for the Company to make an informed judgment about the outcome of these matters.

Based on findings during an internal investigation, the Company self-reported to the SEC and the DoJ, to various authorities in South Africa and other countries as well as to certain multilateral financial institutions potential suspect payments and other compliance concerns in connection with some of the Company’s dealings with Eskom and related persons. Many of those parties have expressed an interest in, or commenced an investigation into, these matters and the Company is cooperating fully with them. Although the Company believes that there may be an unfavorable outcome in one or more of these compliance-related matters, at this time it is not possible for the Company to make an informed judgment about the possible financial impact.”

The U.K. Serious Fraud Office recently announced:

“After a thorough and detailed review of the available evidence, the SFO has concluded that this case did not meet the relevant test for prosecution as defined in the Code for Crown Prosecutors.”

If ABB were to resolve an FCPA enforcement action based on the conduct under investigation, it would be the FCPA’s first three time repeat offender.

The first time ABB resolved a Foreign Corrupt Practices Act enforcement action was in 2004 concerning conduct in Nigeria, Angola and Kazakhstan. The $16.4 million enforcement action involved an SEC component ($5.9 million) and a DOJ component ($10.6 million).

The second time ABB resolved an FCPA enforcement action was in 2010 concerning conduct in Mexico as well as in connection with the Iraqi U.N. Oil for Food program. The $58.3 million enforcement action involved an SEC component ($39.3 million) and a DOJ component ($19 million).

Former Congressman

According to this report:

“Former Miami Republican congressman David Rivera is under federal investigation for possible violations of the Foreign Corrupt Practices Act, as well as failing to register as an agent of Venezuela’s socialist regime, according to four sources familiar with the case who spoke to Univision. The investigation, conducted by the FBI and federal prosecutors in Miami, began in 2017 and is ongoing, according to the sources, though they expressed concern over its slow progress. The sources consulted by Univision and who asked not to be identified so as not to hinder the investigation, explained that the FBI has questioned several witnesses about Rivera’s bank transactions and that prosecutors are in possession of potentially incriminating text messages from Rivera. Rivera is being investigated for payments involving officials or citizens of another country and for not having registered as an agent of a foreign government while carrying out activities for the benefit of the regime of Nicolás Maduro in Venezuela, they said.”

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