Difference between revisions of "Foreign bribery and FCPA violations"

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The table below identifies some of the top SEC and DOJ enforcement actions against companies for FCPA violations:
The table below identifies some of the top SEC and DOJ enforcement actions against companies for FCPA violations:

The table below identifies some of the largest SEC enforcement actions against companies for accounting fraud:
{| class="wikitable"
|Monetary Sanctions
|FCPA Violation
|[https://www.justice.gov/opa/pr/odebrecht-and-braskem-plead-guilty-and-agree-pay-least-35-billion-global-penalties-resolve $3.5 Billion]
|Brazil-based global construction company Odebrecht had a complex corruption scheme that paid out hundreds of millions of dollars in bribes to government officials on three continents for more than a decade. Odebrecht’s sophisticated bribery operation included the creation of a secret financial structure within the company called “Division of Structured Operations.” Its sole purpose was accounting for and disbursing bribery payments. A separate, off-book communications system was used to facilitate and record the illegal payments. Funds were passed through several shell companies to further conceal the bribery.
|[https://www.justice.gov/opa/pr/petr-leo-brasileiro-sa-petrobras-agrees-pay-more-850-million-fcpa-violations $1.78 Billion]
|Senior Petrobras executives inflated the cost of infrastructure projects by overpaying contractors that in turn, paid billions in kickbacks to Petrobras executives, who then shared the proceeds with Brazilian politicians and political parties. Petrobras fraudulently recorded the bribes as funds spent on improving and procuring assets, resulting in an overstatement of assets totaling approximately $2.5 billion.
|[https://www.justice.gov/opa/pr/ericsson-agrees-pay-over-1-billion-resolve-fcpa-case $1 Billion]
|According to the DOJ's announcement of the settlement: "...beginning in 2000 and continuing until 2016, [Ericsson] conspired with others to violate the FCPA by engaging in a longstanding scheme to pay bribes, to falsify books and records and to fail to implement reasonable internal accounting controls. Ericsson used third party agents and consultants to make bribe payments to government officials and/or to manage off-the-books slush funds. These agents were often engaged through sham contracts and paid pursuant to false invoices, and the payments to them were improperly accounted for in Ericsson’s books and records."
|Time Warner
|[https://www.sec.gov/news/press/2005-38.htm $300 Million]
|Time Warner engaged in securities fraud related to its accounting for online advertising revenue. It used “round-trip transactions” to inflate its online advertising revenue to hide the business slow down.
|Qwest Communications
|[https://www.sec.gov/litigation/litreleases/lr18936.htm $250 Million]
|Qwest intentionally recognized over $3.8 billion in revenue and excluded $231 million in expenses that did not meet generally accepted accounting principles (GAAP) in an attempt to meet their predicted revenue and earnings projections.
|Computer Associates
|[https://www.sec.gov/news/press/2004-134.htm $225 Million]
|Computer Associates prematurely recognized over $3.3 billion in revenue by manipulating its quarter end cutoff dates to meet Wall Street’s quarterly earnings estimates. SEC’s Northeast Regional Office Director Schonfeld compared it to a team “that plays on after the final whistle has blown … until it had all the points it needed to make every quarter look like a win.”
|Panasonic Corp
|[https://www.sec.gov/news/press-release/2018-73 $143 Million]
|Panasonic overstated pre-tax and net income by prematurely recognizing more than $82 million in revenue by backdating an agreement with an airline. Additionally, Panasonic “lacked sufficient internal accounting controls and failed o make and keep accurate books and records in connection with purported consultant retained by PAC.”
|[https://business.cch.com/srd/2016-194-092716.pdf $140 Million]
|Weatherford inflated earnings by using deceptive income tax accounting which included an international tax avoidance structure that reduced its effective tax rate (ETR) and tax expense. False financial statements inflated earnings by over $900 million.
|[https://www.sec.gov/litigation/litreleases/lr19280.htm $100 Million]
|Shortly after Healthsouth went public in 1986, it began to “artificially inflate its earnings to meet Wall Street analysts’ expectations and maintain the market price.” Since 1999, it overstated its earnings by over $1.4 billion.
|Lehman Brothers
|[https://www.sec.gov/litigation/litreleases/judgm18116.pdf $80 Million]
|Lehman intentionally manipulated their accounting reports through numerous Repo105 transactions that hid their actual debt. When they declared bankruptcy they were $615 billion in debt.