DOJ Enforcement (Corporate)
The DOJ did not bring any corporate FCPA enforcement actions in the third quarter.
Year to date, there have been 3 corporate FCPA enforcement actions. DOJ recovery in these enforcement action has been approximately $258 million. The Total enforcement action (approximately $245 million) comprises 95% of this amount. All 3 enforcement actions were resolved via a deferred prosecution agreement (2) or a non-prosecution agreement (1). At present, none of the enforcement actions have resulted in any individual charges against company employees.
DOJ Enforcement (Individuals)
Other than an additional individual defendant being added to the existing enforcement action involving individuals associated with Alstom, there were no new individual FCPA enforcement actions in the third quarter.
Year to date, the DOJ has announced FCPA or related charges against 12 individuals. (Certain of these charges were filed in 2012 or 2011, but unsealed in 2013). The individual charges have been in connection with 4 matters.
Tomas Clark, Alejandro Hurtado, and Ernesto Lujana (all individuals are associated with broker-dealer, Direct Access Partners).
Frederic Pierucci, David Rothschild, William Pomponi, and Lawrence Hoskins (all individuals are associated with Alstom)
Frederic Cilins (obstruction of justice charge) (Cilins is associated with BSG Resources)
Bernd Kowalewsi, Jald Jensen, Peter DuBois, and Neah Uhl (all individuals are associated with BizJet).
The SEC did not bring any FCPA enforcement actions in the third quarter.
Year to date, there have been 4 corporate FCPA enforcement actions. SEC recovery in these enforcement action has been approximately $162 million. The Total enforcement action ($153 million) comprises 94% of this amount. At present, none of the enforcement actions have resulted in any individual charges against company employees.
The SEC has not brought any FCPA charges against individuals in 2013.
Despite the lack of new FCPA enforcement actions in the third quarter, several companies joined the list of those under FCPA scrutiny.
For instance, one of the more notable developments from the third quarter was various headlines concerning GlaxoSmithKline and how it is the subject of bribery scrutiny for its business practices in China. As noted in this prior post, GSK’s scrutiny is hardly earth-shattering as the pharmaceutical industry (and more broadly the healthcare sector) has been the subject of much scrutiny in the past few years including for business practices in China.
What is unique about GSK’s scrutiny is the Chinese government is investigating the alleged conduct at issue. Other items of interest include the evolution of GSK’s bribery scrutiny, the conduct of potential rogue employees, and the competition between various law enforcement agencies that is likely to ensue.
In connection with GSK’s scrutiny by the Chinese government, some have questioned the motivations of the Chinese government in investigating GSK and several other multinational pharmaceutical companies operating in China. This prior post poses the question “should motivations matter.”
Another notable instance of FCPA scrutiny (it was a lead article in the NY Times) from the third quarter concerned JPMorgan and its alleged hiring of relatives of alleged Chinese “foreign officials.” (See here for the prior post). The company’s FCPA scrutiny prompted much commentary (see here), including how hiring relatives of U.S. officials is common in the U.S., and once again exposed a seeming double standard between enforcement of the U.S. domestic bribery statute and the FCPA. JPMorgan’s FCPA scrutiny focused attention on hiring family members of foreign officials and/or otherwise providing things of value to family members of alleged “foreign officials” and this prior post detailed DOJ FCPA opinion releases that touch upon such issues.
Judicial Scrutiny of DPAs
Non-prosecution agreements and deferred prosecution agreements of course are not just used to resolve FCPA enforcement actions. However, year-after-year, approximately 25-50% of the agreements are used to resolve FCPA enforcement actions. Thus, a July order by U.S. District Court Judge John Gleeson (E.D.N.Y.) approving the DPA in the HSBC enforcement action was noteworthy. As highlighted in this prior post, Judge Gleeson stated that “a pending federal criminal case is not window dressing; nor is the court … a potted plant.”