The following post was adapted from a blog post written by our contributing editor, Professor Mike Koehler, and a version of it originally appeared on his FCPA Professor website. Professor Koehler developed our Global Anti-Bribery and Corruption course.
If you've been paying attention to FCPA enforcement news over the last few months, it's no surprise that the list of Q1 actions is a long one.
Keep reading for a full summary of Foreign Corrupt Practices Act enforcement activity and related developments from the first quarter of 2016.
DOJ Enforcement (Corporate)
The DOJ brought 3 corporate FCPA enforcement actions in the first quarter. DOJ recovery in these actions was approximately $267 million (after accounting for various credits and deductions in the VimpelCom action).
PTC Entities (February 16th)
Penalty: $14.5 million
Penalty: $460.3 million (reduced to $230.1 million after accounting for various credits and deductions)
Olympus Latin America (March 1st)
Penalty: $22.8 million
DOJ Enforcement (Individual)
In connection with a 2015 individual FCPA enforcement action involving Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A., the DOJ unsealed additional charges against Moises Abraham Millan Escobar (Millan), a former employee of Abraham Shiera, an individual previously charged in 2015.
SEC Enforcement (Corporate)
The SEC brought 7 corporate FCPA enforcement actions in the first quarter. SEC recovery in these actions was approximately $231 million (after accounting for various credits and deductions in the VimpelCom action).
Settlement: Approximately $3.9 million (disgorgement of $3.7 million and prejudgment interest of $188,896)
SciClone Pharmaceuticals (February 4th)
Settlement: $12.8 million ($9,426,000 in disgorgement, prejudgment interest of $900,000 as well as a $2.5 million civil penalty)
PTC (February 16th)
Settlement: $13.7 million ($11.9 million in disgorgement and $1.8 in prejudgment interest)
VimpelCom (February 18th)
Settlement: $167.5 million in disgorgement (after accounting for various credits and deductions)
Qualcomm (March 1)
Settlement: $7.5 million civil penalty
Nordion (March 3)
Settlement: $375,000 civil penalty
Settlement: $25 million ($23 million in disgorgement and prejudgment interest and a $2 million penalty)
SEC Enforcement (Individual)
The SEC brought FCPA enforcement actions against three individuals.
In connection with the Nordion enforcement action, the SEC also found that Mikhail Gourevitch (a dual Canadian and Israeli citizen who was fired years ago by Nordion) violated the FCPA’s anti-bribery, books and records, and internal controls provisions. Without admitting or denying the SEC’s findings, Gourevitch agreed to pay disgorgement of $100,000, prejudgment interest of $12,950, and a $66,000 civil penalty.
In connection with the PTC enforcement action, the SEC also alleged in a DPA that Yu Kai Yuan (a Chinese citizen who resides in Shanghai and a former employee of the PTC China entities) caused violations of the FCPA’s books and records and internal controls provisions. Without admitting or denying the SEC’s allegations, Yuan agreed to refrain from violating the securities laws and agreed to a so-called “muzzle clause.”
The SEC found in an administrative cease and desist order that Ignacio Cueto Plaza, the current CEO of LAN airlines, caused books and records and internal controls violations by LAN, that Cueto also knowingly circumvented or knowingly failed to implement a system of internal accounting controls or knowingly falsified book, record or account, and that Cueto also violated falsified or cause to be falsified, a book, record, or account. Without admitting or denying the SEC’s findings, Cueto agreed to cease and desist from future legal violations and agreed to pay a $75,000 civil penalty.
Recommended reading from the FCPA Professor
While not an FCPA case, this post highlights how the Supreme Court recently agreed to hear a domestic corruption appeal to address the meaning of “official action” (a term also used in the FCPA).
As highlighted in this post, in what is believed to be a first, a federal court judge construed the the rarely implicated “public international organization” prong of the FCPA’s “foreign official” definition.
As highlighted in this post, despite much talk about the importance of transparency, the DOJ continues to block public release of the Siemens’ monitor report, a condition of settlement from the still record-setting $800 million FCPA enforcement action against Siemens in 2008.
Professor Mike Koehler
Law Professor Mike Koehler is the founder and editor of the popular website FCPA Professor and writes daily on anti-bribery and corruption issues. Described as the “the Wall Street Journal concerning all things FCPA-related,” and "the most authoritative source for those seeking to understand and apply the FCPA," FCPA Professor has been named a "Top Law Blog" for in-house counsel by Corporate Counsel magazine.