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What You Need To Know From Q1


This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the first quarter of 2015.

DOJ Enforcement (Corporate)

There were no DOJ corporate FCPA enforcement actions in the first quarter.

DOJ Enforcement (Individual)

As highlighted here, the DOJ announced criminal charges against Dmitrij Harder, the former owner and President of Chestnut Consulting Group Inc. for allegedly bribing an official with the European Bank for Reconstruction and Development. The enforcement action is notable in that it invoked the rarely used “public international organization” prong of the FCPA’s “foreign official” element.

SEC Enforcement (Corporate)

PBSJ (Jan. 22nd)

See here for a prior post.

Charges: Violations of the FCPA’s anti-bribery, books and records, and internal controls provisions.

Settlement:  The charges were resolved via a deferred prosecution agreement in which the company agreed to pay approximately $3.4 million (disgorgement and interest of $3,032,875 and a penalty of $375,000).

Disclosure: Voluntary Disclosure

Individuals Charged:  Yes (see below).

Related DOJ Enforcement Action:  No.

Goodyear (Feb. 24th)

See here, 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:  $16,228,065 (disgorgement of $14,122,525 and prejudgment interest of $2,105,540).

Disclosure: Voluntary disclosure.

Individuals Charged:  No

Related DOJ Enforcement Action: No

SEC Enforcement (Individual)

In connection with the PBSJ enforcement action, Walid Hatoum (a former executive of PBS&J International, Inc.) agreed, without admitting or denying the SEC’s findings, to resolve an administrative action finding violations of the FCPA’s anti-bribery, books and records, and internal controls provisions.  Hatoum agreed to pay a $50,000 civil penalty.

Other Developments or Items of Interest

It was an active speaking quarter for SEC enforcement officials.  This post analyzes an FCPA speech given by the SEC’s Director of Enforcement at a pharmaceutical conference and this post analyzes how the same individual was on the hot seat during a Congressional hearing regarding the surge in SEC administrative actions.  This post analyzes how the numbers do not support the SEC Chair’s recent statement that “the Commission is focused on holding individuals accountable in FCPA cases.”

Biomet announced that its 2013 deferred prosecution agreement was extended for a year based on the company’s fresh FCPA scrutiny and this post highlights two issues related to this development.

On the FCPA-related civil litigation front, as highlighted in this post, a federal court judge recently dismissed an Avon shareholder derivative complaint finding, among other things, that just because “the FCPA is not commonly the subject of litigation” does not create a substantial federal interest in state law claims related to the FCPA.

In the spirit of March Madness, this post called a timeout regarding certain commentary about the February FCPA enforcement action against Goodyear.

As highlighted here in connection with hearings of Attorney General Nominee Loretta Lynch, the Senate remains interested in FCPA issues.

As highlighted here, in an action related to U.S. v. Esquenazi (the 11th Circuit’s 2014 “foreign official” decision), the 11th Circuit discussed the “routine governmental action” prong of the FCPA’s facilitating payments exception.

As highlighted here, a federal court judge rejected a DOJ deferred prosecution agreement.  While outside the FCPA context, given the prominence of DPAs (and NPAs) in the FCPA context, the case – and upcoming appeal – are certainly worth watching.

As highlighted here  the DOJ announced that Andrew Weissmann was selected as the Chief of the Criminal Division’s Fraud Section. In recent years, Weissmann has been a vocal advocate of FCPA reform and more broadly reforming corporate criminal liability principles.  For issues raised by Weissmann’s appointment, see this prior post “In the FCPA Space, Who Speaks for Whom?”

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