This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the second quarter of 2020. For a similar post from Q1 2020, see here.
In many respects, the second quarter of 2020 was likely the most unique quarter in FCPA history given the impacts of COVID-19.
DOJ Enforcement (Corporate)
The DOJ brought one corporate FCPA enforcement action in the second quarter. DOJ recovery in this action was approximately $234 million.
Novartis (June 25)
See here and here for prior posts.
Charges: As to Novartis Hellas S.A.C.I. (Novartis Greece), a criminal information charging one count of conspiracy to violate the FCPA’s anti-bribery provisions and one count of conspiracy to violate the FCPA’s books and records provisions. As to Alcon Pte Ltd., a subsidiary of Novartis at the time of the misconduct, a criminal information charging conspiracy to violate the books and records provisions.
Resolution Vehicles: Deferred Prosecution Agreements
Guidelines Range: As to Novartis Greece, $180 – $360 million. As to Alcon, $11.9 – $23.8 million.
Settlement: Novartis Greece – $225 million. Alcon – $8.9 million.
Origin: Based on the company’s disclosure, apparent foreign law enforcement investigation and/or subpoeneas and document requests from the DOJ/SEC.
Monitor: No
Individuals Charged: No
DOJ Enforcement (Individual)
The DOJ did not bring or announce any individual enforcement actions in the second quarter.
SEC Enforcement (Corporate)
The SEC brought two corporate FCPA enforcement action in the second quarter. SEC recovery in these actions was approximately $137 million.
Eni (April 17)
See here and here for prior posts
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: $24.5 million in disgorgement and prejudgment interest ($19.75 million in disgorgement and $4.75 million in prejudgment interest).
Origin: Voluntary disclosure. As stated by the company: “In 2012, Eni contacted the U.S. Department of Justice (DoJ) and the U.S. SEC in order to voluntarily inform them about this matter, and has kept them informed about the developments in the Italian Prosecutors’ investigations and proceedings. Following Eni’s notification, both the U.S. SEC and the DoJ started their own investigations regarding this matter.”
Individuals Charged: No
Related DOJ Enforcement Action: No
Novartis (June 25)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: $112.8 million.
Origin: Based on the company’s disclosure, apparent foreign law enforcement investigation and/or subpoeneas and document requests from the DOJ/SEC.
Individuals Charged: No
Related DOJ Enforcement Action: Yes
SEC Enforcement (Individual)
The SEC brought one individual enforcement action in the second quarter. See here for a summary of the SEC’s civil complaint against Asante Berko (a former Executive Director of Goldman Sachs International) for arranging a bribery scheme in Ghana on behalf of a Turkish energy company.
Other Developments or Items of Interest
This post discusses the impact of the COVID-19 crisis on FCPA enforcement and this post assesses the narrative that FCPA enforcement will increase post COVID-19 crisis because that’s what happened post-financial crisis (short answer – there is no evidence that FCPA enforcement increased circa 2010-2012 because of the financial crisis ). As highlighted here, FCPA enforcement officials addressed various COVID-19 related questions. In addition, the DOJ’s Senior Deputy Chief of the Fraud Section addressed the oft-cited personal protective equipment FCPA hypothetical.
As highlighted here, a bill introduced in the House seeks to transfer pharma FCPA civil settlement amounts to fund pediatric disease research.
Once again, the Supreme Court rejected the DOJ’s overly expansive interpretation of a criminal statute. (See here
As highlighted here , Citgo turned plaintiff and sued an FCPA violator for bribing its employees.
As highlighted here, the Supreme Court held in Liu v. SEC that for purposes of a statute concerning SEC actions in federal court that a “disgorgement amount that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under the statutory scheme. This post highlights an important question relevant to FCPA enforcement (recognizing that the vast majority of SEC FCPA enforcement actions against issuers are resolving administratively).
As highlighted here, the DOJ revised its “Evaluation of Corporate Compliance Programs” guidance document. As discussed in this post, big picture the revised guidance now uses the terms “effective” or “effectively” 54 times compared to 51 times and poses 168 questions compared to 151 questions.
The post What You Need To Know From Q2 appeared first on FCPA Professor.