Several 2014 year in review posts will be published this month. But first, the fourth quarter of 2014 needs to be closed out.
This post provides a summary of Foreign Corrupt Practices Act enforcement actions and FCPA related events from the fourth quarter of 2014. See here for a similar post from Q1, here for Q2 and here for Q3.
DOJ Enforcement (Corporate)
The DOJ brought four corporate enforcement actions in the fourth quarter. (Alstom, Avon, Dallas Airmotive, and Bio-Rad). DOJ recovery in these enforcement actions was approximately $868 million (with the Alstom action contributing the bulk of this number – $772 million).
In 2014, the DOJ brought seven corporate enforcement actions (Alstom, Avon, Dallas Airmotive, Bio-Rad, HP related entities, Marubeni, and Alcoa). DOJ recovery in these enforcement actions was approximately $1.25 billion (with again the Alstom action contributing the bulk of this number). At present, only the Alstom action has resulted in any individual charges against company employees.
The DOJ enforcement actions from the fourth quarter are summarized below.
Alstom and Related Entities (December 22nd).
See here and here for prior posts
Charges: As to Alstom S.A., violation of the FCPA’s books and records and internal controls provisions. As to Alstom Network Schweiz AG, conspiracy to violate the FCPA’s anti-bribery provisions. As to Alstom Power Inc., conspiracy to violate the FCPA’s anti-bribery provisions. As to Alstom Grid Inc., conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: As to Alstom and Alstom Network Schweiz, plea agreements. As to Alstom Power and Alstom Grid, DPAs.
Guidelines Range: As to Alstom $532.8 million to $1.065 billion
Penalty: As to Alstom, $772 million (the other entities were not required to pay separate penalties).
Disclosure: The enforcement action presumably originated from a prior 2011 Swiss enforcement action (see here and here).
Monitor: No
Individuals Charged: Yes (as to the Indonesia conduct – see here).
Avon Entities (December 17th)
See here and here for prior posts
Charges: As to Avon China, conspiracy to violate the FCPA’s books and records provisions. As to Avon Products, conspiracy to violate the FCPA’s books and records provisions and violation of the FCPA’s internal controls provisions.
Resolution Vehicle: As to Avon China, a plea agreement; as to Avon Products a DPA.
Guidelines Range: As to Avon China, $73.9 million to $147.9 million; as to Avon Products, $84.6 million to $169.1 million.
Penalty: As to Avon China, $67.6 million; as to Avon Products $67.6 million but the Avon China penalty was deducted from this amount.
Disclosure: Voluntary Disclosure.
Monitor: Yes
Individuals Charged: No
Dallas Airmotive (December 10th)
See here for the prior post
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and violation of the FCPA’s anti-bribery provisions.
Resolution Vehicle: DPA
Guidelines Range: $17.5 million to $35 million
Penalty: $14 million
Disclosure: The enforcement action appears to be casually related to a prior enforcement action against BizJet International and certain of its executives
Monitor: No
Individuals Charged: No
Bio-Rad (November 3rd)
See here and here for prior posts
Charges: Not applicable
Resolution Vehicle: NPA
Guidelines Range: Not set forth in the NPA
Penalty: $14.4 million
Disclosure: Voluntary Disclosure
Monitor: No
Individuals Charged: No
DOJ Enforcement (Individual)
The DOJ did not bring any individual enforcement actions in the fourth quarter.
Year-to-date, the DOJ has brought three core actions in which various individuals have been charged. (See here, here and here).
SEC Enforcement (Corporate)
The SEC resolved four corporate enforcement actions (Avon, Bruker, Bio-Rad and Layne Christensen) in the fourth quarter. SEC recovery in these enforcement action was approximately $115 million. The enforcement actions have not resulted, at least yet, in any individual charges against company employees.
In 2014, the SEC resolved seven corporate enforcement actions (Avon, Bruker, Bio-Rad, Layne Christensen, Smith & Wesson, HP and Alcoa). All but the Avon action was resolved via administrative cease and desist orders. SEC recovery in these enforcement actions was approximately $327 million. At present, none of the enforcement actions have resulted in any individual charges against company employees.
The SEC enforcement actions from the fourth quarter are summarized below.
Avon (December 17th)
See here and here for prior posts
Charges: Violation of the FCPA’s books and records and internal controls provisions
Settlement: Approximately $67.4 million ($52,850,000 in disgorgement plus prejudgment interest of $14,515,013.13)
Disclosure: Voluntary Disclosure
Individuals Charged: No
Related DOJ Enforcement Action: Yes
Bruker Corp. (December 15th)
See here for the prior post.
Charges: None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal control provisions.
Settlement: Approximately $2.4 million ($1,714,852 in disgorgement, $310,117 in prejudgment interest, and a $375,000 penalty)
Disclosure: Voluntary Disclosure
Individuals Charged: No
Related DOJ Enforcement Action: No
Bio-Rad (November 3rd)
See here and here for prior posts
Charges: None. Administrative cease and desist order finding violations of the FCPA’s anti-bribery provisions and books and records and internal control provisions.
Settlement: Approximately $40.7 million in disgorgement
Disclosure: Voluntary Disclosure
Individuals Charged: No
Related DOJ Enforcement Action: Yes
Layne Christensen (November 3rd)
See here and here for prior posts
Charges: None. Administrative cease and desist order finding violations of the FCPA’s anti-bribery provisions and books and records and internal control provisions.
Settlement: Approximately $5.1 million ($3,893,472.42 in disgorgement plus $858,720 in prejudgment interest as well as a $375,000 penalty amount)
Disclosure: Voluntary Disclosure
Individuals Charged: No
Related DOJ Enforcement Action: No
SEC Enforcement (Individual)
For the first time since April 2012, the SEC brought an FCPA enforcement action against an individual. This enforcement action is summarized below.
Stephen Timms and Yasser Ramahi (November 17th)
See here for the prior post
Charges: None. Administrative cease and desist order finding violations of the FCPA’s anti-bribery provisions, causing violations of the FCPA’s books and records provisions
Settlement: Timms and Ramahi consented to the entry of the order and agreed to pay financial penalties of $50,000 and $20,000 respectively.
Employer Charged: The individuals were associated with FLIR System, Inc. but at present the company has not been charged
Related DOJ Enforcement Action: No
Other Developments or Items of Interest
As highlighted here, in what has become a mid-November tradition, DOJ and SEC officials gave speeches at an FCPA conference. Topics discussed included the following: individual prosecutions, voluntary disclosure and cooperation, compliance programs, asset recovery, and foreign law enforcement cooperation. Likewise September and October were also active months for DOJ policy speeches that touched upon FCPA topics. Posts here, here and here analyze the speeches.
As highlighted here, FCPA individual defendant Joseph Sigelman is challenging various aspects of the DOJ’s case including its interpretation and application of the “foreign official” element – specifically whether an individual employed by Ecopetrol (an alleged state-owned and state-controlled petroleum company in Colombia) is a “foreign official.”
In this guest post, one of the most read ever on FCPA Professor, an anonymous compliance professional provides an inside perspective of an FCPA investigation.
As highlighted here, the Supreme Court declined an opportunity to hear a substantive FCPA case for the first time in FCPA history. (See here, here and here for briefing in the “foreign official” challenge).
See here for an informative Q&A with an individual experienced in the FCPA from a number of vantage points: DOJ FCPA enforcement attorney, in-house counsel, and lawyer in private practice.
