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What You Need To Know From Q4


Several 2015 year in review posts will be published this month.

But first, the fourth quarter of 2015 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 2015. (See similar posts herehere and here for Q1, Q2 and Q3).

DOJ Enforcement (Corporate)

Consistent with the slow year in DOJ corporate FCPA enforcement, there was no DOJ corporate FCPA enforcement actions in the fourth quarter.

What makes this unusual – compared to historical trends – is that December specifically, and the fourth quarter generally, has traditionally been a very active month / quarter for DOJ FCPA enforcement. (See here for the prior post).

DOJ Enforcement (Individual)

As highlighted in this post, in the fourth quarter the DOJ unsealed a criminal indictment against Roberto Rincon and Abraham Shiera for alleged improper business practices with officials at Petroleos de Venezuela S.A. (PDVSA), Venezuela’s alleged state-owned and state-controlled oil company.

SEC Enforcement (Corporate)

The SEC brought one corporate FCPA enforcement actions in the fourth quarter. SEC recovery in this action was $14.7  million.

That there was only one corporate SEC FCPA enforcement action in the fourth quarter was likewise unusual – compared to historical trends – is that December specifically, and the fourth quarter generally, has traditionally been a very active month / quarter for SEC FCPA enforcement. (See here for the prior post).

Bristol-Myers Squibb (October 5th)

See here and here for prior posts

Charges:   None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions

Settlement:  $14.7 million

Disclosure: According to the company’s disclosures, its FCPA scrutiny began in 2006 when the SEC informed the company that it had begun a formal inquiry into the activities of certain of the company’s subsidiaries and its employees and agents. In March 2012, the company received a subpoena from the SEC issued in connection with its investigation under the FCPA, primarily relating to sales and marketing practices in various countries.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

SEC Enforcement (Individual)

The SEC did not bring any individual FCPA enforcement actions in the fourth quarter.

Other Developments or Items of Interest

In the fourth quarter there was a U.K. (and related) enforcement action against Standard Bank.  The U.K. action was a first in two regards: (i) the first use of Section 7 of the Bribery Act (the so-called failure to prevent bribery offense) in a foreign bribery action; and (ii) the first use of a deferred prosecution agreement in the U.K. This post highlighted “what” was resolved – an alleged violation of Sec. 7 of the Bribery Act for failure to prevent bribery. This post highlighted “how” the enforcement action was resolved – the U.K.’s first deferred prosecution agreement. This post highlighted the SEC’s creativity in also bringing an enforcement action against Standard Bank. This post highlighted the thoughts of others about the enforcement action.

Consistent with fourth quarters in prior years, in the fourth quarter DOJ and SEC officials delivered FCPA policy speeches. However, to those well-versed on prior DOJ or SEC FCPA policy speeches, there was little new information in either Assistant Attorney General Leslie Caldwell’s FCPA speech or Director of SEC Enforcement Andrew Ceresney’s FCPA speech. The only new item in Ceresney’s speech was the statement that “the Enforcement Division has determined that going forward, a company must self-report misconduct in order to be eligible for the Division to recommend a DPA or NPA to the Commission in an FCPA case.” As a practical matter, this statement is not very significant as the SEC has only used NPAs or DPAs three time in FCPA cases since the SEC authorized their use in 2010.

In other DOJ speeches relevant to FCPA enforcement in the fourth quarter, Assistant Attorney General Caldwell spoke about the DOJ’s new compliance attorney position as highlighted in this post and Deputy Attorney General Sally Yates elaborated on certain points outlined in the so-called Yates Memo released in September as highlighted in this post.

As highlighted in this post, FCPA “tips” continue to be a minor component of the SEC’s whistleblower program.

As highlighted here, in the pending DOJ prosecution of Dmitrij Harder, Harder filed a motion to dismiss challenging various aspects of the DOJ’s case including the DOJ’s “foreign official” theory as well as the DOJ’s enforcement theory relevant to the third-party payment provisions.

As highlighted in this post, Judge Sullivan (D.D.C.) wrote a law review-like opinion concerning the issue of “the Court’s role, if any, in determining whether [the DPAs] should be approved at all.”

As highlighted here, the Wall Street Journal published what amounts to a “nana nana boo boo” article seemingly in response to the New York Times previous Wal-Mart FCPA reporting in that the WSJ asserts, citing unnamed sources, that the actual legal investigation of Wal-Mart (as opposed to the journalism investigation) “uncovered evidence that contradicted some of the allegations in the New York Times articles.” More fundamentally, Wal-Mart’s entire FCPA scrutiny since December 2011, and the media reporting of it, demonstrates that greater restraint and discipline is needed by various FCPA commentators (and others) who are all to quick to react to media reporting of FCPA issues by non-lawyer journalists.

The fourth quarter represented several FCPA anniversaries of sorts. This post highlighted the 5th anniversary of the DOJ declaring a “new era” of FCPA enforcement; this post marked the 5th anniversary of the Senate’s FCPA hearing; this post recognized the 3rd anniversary of the DOJ and SEC issuing the FCPA Guidance; and this post highlighted the FCPA turning 38.

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