Emtrain Blog

FCPA Enforcement Update: Q1 Enforcement Spree

Posted by Allison Baker

March 7, 2016

FCPA enforcement update for Q1 2016

The DOJ and SEC have been on a roll the last few weeks. In an unprecedented spree of FCPA enforcement over the past approximate month, eight separate actions have been brought against companies in varying industries such as telecom, pharma, and technology.

The latest of these FCPA enforcement actions against Canadian company Nordion (a global health science company) is notable – it’s the first ever FCPA action against a Canadian company.

Since approximately 30% of foreign issuers subject to the FCPA are Canadian, this action will likely not be the last of its kind and indeed several other Canadian companies under scrutiny.

So, what happened at Nordion that resulted in the enforcement action? Here’s the breakdown:

  • 16 years ago, Mikhail Gourevitch (fired by Nordion several years back) began engaging in improper conduct that resulted in improper payments being made indirectly to a Russian official. Gourevitch profited from his conduct via kickbacks (in the amount of $100,000) and otherwise concealed his conduct from his employer.

  • The SEC’s order found that Nordion violated the FCPA’s books and records and internal controls provisions and Nordion (Canada) Inc., and successor company, agreed to settle without admitting or denying the SEC’s findings.

  • The SEC stated that Nordion performed "virtually no due diligence" on the agent engaged by the former employee and “Nordion provided little, if any, anticorruption compliance training to its employees about how to conduct business in countries well known for corruption.”

A noticeable trend in the other recent FCPA enforcement actions is the enforcement agencies’ admonishment of the lack of proper compliance training at the subject companies.

FCPA compliance training isn’t merely nice to have in the current FCPA enforcement climate. The SEC and DOJ are sending a message loud and clear: train your employees or pay the price.

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Topics: Code of Conduct, FCPA, global anti-bribery, ethical workplace culture