Securities and Exchange Commission (SEC)

Vacation is great, but it can involve a great deal of planning.  And, paradoxically, leisure travel can involve more planning than traveling for business.  That travel-related work stands out as a centerpiece of the October 22, 2013 Diebold, Inc. (Diebold) Foreign Corrupt Practices Act (“FCPA”) settlement with the U.S. Securities and Exchange Commission (SEC) and Deferred Prosecution Agreement with the U.S. Department of Justice (DOJ).  The $48 million in penalties, disgorgement, and interest, and the 18-month compliance monitor imposed on Diebold under the settlement, serve to demonstrate the strong emphasis that the DOJ and SEC place on appropriate compliance planning, and the significant steps that will be taken against companies seen to be lacking an internal compliance compass.
Continue Reading Tryin’ to Make a Dollar out of Fifteen Cents: The Diebold FCPA Settlement Explains What Officials Did on Their Vacation

The U.S. District Court for the Southern District of New York has held that the whistleblower protection provisions of the Dodd-Frank Act do not apply outside the United States, even where the employee alleged he was terminated for raising compliance concerns under U.S. international law. Specifically, the court found that Dodd-Frank did not protect an employee of Siemens in China who alleged he was terminated in retaliation for raising compliance concerns under the U.S. Foreign Corrupt Practices Act (FCPA). The decision will strike many observers as remarkable, since the extraterritorial provisions of the FCPA itself have been construed so broadly. The opinion in the case, Liu v. Siemens AG, Civ. No. 13 Civ. 317 (WHP) Slip Op. (S.D.N.Y. Oct. 21, 2013), may be viewed online here.
Continue Reading Dodd-Frank Whistleblower Protection: For America Only

By: Thad McBride, Mark Jensen, and Cheryl Palmeri

In early August, the New York Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating JPMorgan Chase related to alleged violations of the Foreign Corrupt Practices Act (FCPA) in China.  According to the article, the press had not previously reported on the investigation, and the Times knowledge of it was based on a “confidential United States government document.”  The article generated a number of similar news reports.
Continue Reading The FCPA in the News: Big Scoops, Real Fallout

By: Mark Jensen

In a July 23, 2013 opinion, the U.S. District Court for the District of Columbia upheld the SEC’s rule requiring disclosure of companies’ use of conflict minerals originating in and around the Democratic Republic of the Congo (“DRC”).  The decision underscores the importance of due diligence provisions under the new law, which come into effect for large issuers during this reporting year, and should be incorporated into May 2014 reports.

Continue Reading Still Standing: U.S. Court Upholds SEC Conflicts Minerals Rule

By: Cheryl Palmeri

On May 29, 2013, Total, S.A. (Total), the French petroleum corporation, agreed to pay nearly $400 million to resolve charges that it violated the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act (FCPA).  Collectively, the penalties imposed by the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) against Total mark one of the largest settlement amounts yet under the FCPA.
Continue Reading Total Settlement of FCPA Charges

By: Matthew Riemer and Mark Jensen

On December 17, 2012, the Securities and Exchange Commission (“SEC”) announced a settlement under the U.S. Foreign Corrupt Practices Act (“FCPA”) with Allianz SE (“Allianz”), the insurance company based in Germany, resulting in $5.3 million in civil penalties and more than $7 million in disgorgement and interest.  The settlement stemmed from a two-year investigation into allegations that an Allianz subsidiary paid bribes to government officials in Indonesia over a seven-year period and violated the FCPA’s books and records and internal controls provisions.  The Department of Justice (“DOJ”) started its own investigation into potential criminal liability for Allianz, but closed its case in 2011 with a declination letter, an event that was reported in the Wall Street Journal.
Continue Reading No Knowledge, but Hints of Omissions in the Allianz FCPA Settlement

By: Reid Whitten

On August 22, 2012, the Securities and Exchange Commission (SEC) adopted final rules requiring oil, natural gas, and mining companies to report to the SEC certain payments to foreign governments.  The new rules are aimed at increasing transparency in the global resource extraction industry but may create confusing and onerous Foreign Corrupt Practices Act (FCPA) compliance burdens for many U.S. and foreign companies.  For some, the requirements may present an obstacle, but for companies that get ahead of the new rules and tailor their FCPA policy and protocols appropriately, the requirements may be the pivot point they need to step toward a lean and effective compliance regimen.

Continue Reading Stumbling Block or Stepping Stone? Companies Face the Choice: Trip Over the SEC’s New Reporting Requirements or Use them to Launch Strong and Effective Compliance Measures

By: Scott Maberry and Mark Jensen

On August 8, 2012, the U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) announced agreements with the drug manufacturer Pfizer Inc. to settle allegations that a Pfizer subsidiary had paid bribes to non-U.S. doctors and health care system personnel in exchange for prescribing Pfizer products.
Continue Reading Profit Counting: The Pfizer FCPA Settlement

By: Thad McBride and Mark Jensen

On March 26, 2012, U.S. medical device maker Biomet, Inc. (Biomet) agreed with the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) to settle charges related to alleged bribes paid to obtain business in Argentina, Brazil, and China. This is the third – though almost certainly not the last – Foreign Corrupt Practices Act (FCPA) settlement with medical device manufacturers.

In the wake of recent setbacks in the Shot Show and Lindsey cases, the settlement serves as a reminder that the U.S. government is still aggressively enforcing the FCPA and broadly interpreting its provisions.
Continue Reading Continuing the Trend: Medical Device Maker Biomet Settles FCPA Charges For More Than $22 million

By: Thad McBride and Cheryl Palmeri

On February 24, 2012, the U.S. Securities and Exchange Commission (SEC) charged three executives of Noble Corporation (Noble), a Swiss oil services company, with violating the Foreign Corrupt Practices Act (FCPA). The SEC accused Noble’s former CEO and the company’s current Division Manager in Nigeria of arranging hundreds of thousands of dollars in bribes from 2003 to 2007. According to the SEC, the bribes were to induce Nigerian customs officials to grant new temporary permits and extensions to allow Noble’s oil rigs to remain in the country improperly. Both individuals are disputing the charges.

Continue Reading A Noble Pursuit? SEC Brings FCPA Charges Against Individual Oil Services Executives

By: Curt Dombek and Mark Jensen

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), Pub. L. 111-203, signed into law on July 21, 2010, requires the U.S. Securities and Exchange Commission (SEC) to implement regulations under which issuers attest to aspects of the origin of certain “conflict minerals” used in their products, if those products derive from the Democratic Republic of Congo (DRC) or neighboring countries.  Under the SEC’s Proposed Rule, “conflict minerals” would include cassiterite (a source for tin), columbite-tantalite (used to manufacture electronic capacitors), gold, wolframite (a main source of the metal tungsten), or their derivatives, or any other minerals or their derivatives determined by the U.S. Secretary of State to finance conflict in DRC countries. Proposed Rule on Conflict Minerals on December 23, 2010.  75 Fed. Reg. 80,948 (Dec. 23, 2010) at 80,950 (Proposed Rule).  Thus, if the products you sell include these substances, at any level, the new regulations must be considered.

Continue Reading A Surprise Turn on the SEC’s Winding Road to the Dodd-Frank “Conflict Minerals” Rule