Difference between revisions of "Foreign bribery and FCPA violations"

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* On December 22, 2016, Teva Pharmaceutical Industries Ltd. agreed to pay [https://www.sec.gov/news/pressrelease/2016-277.html $519 million] to the SEC and DOJ to settle U.S. charges that it violated the FCPA by paying bribes in its operations in Ukraine, Mexico, and Russia. The U.S. has extensively enforced the FCPA on pharmaceutical firms over the years, especially in countries with national health systems. In these countries, doctors are considered “public officials” for FCPA purposes, which dramatically increases their exposure to FPCA violations. Also in 2016, pharmaceutical giants GlaxoSmithKline, AstraZeneca, and Novartis all settled cases involving FCPA violations.
* On December 22, 2016, Teva Pharmaceutical Industries Ltd. agreed to pay [https://www.sec.gov/news/pressrelease/2016-277.html $519 million] to the SEC and DOJ to settle U.S. charges that it violated the FCPA by paying bribes in its operations in Ukraine, Mexico, and Russia. The U.S. has extensively enforced the FCPA on pharmaceutical firms over the years, especially in countries with national health systems. In these countries, doctors are considered “public officials” for FCPA purposes, which dramatically increases their exposure to FPCA violations. Also in 2016, pharmaceutical giants GlaxoSmithKline, AstraZeneca, and Novartis all settled cases involving FCPA violations.
* On January 16, 2017, Rolls-Royce agreed to pay [https://www.justice.gov/opa/pr/rolls-royce-plc-agrees-pay-170-million-criminal-penalty-resolve-foreign-corrupt-practices-act $809 million] to the DOJ to settle allegations of a long-running scheme to bribe government officials in exchange for government contracts. The settlement proceeds were split between the UK, the United States, and Brazil. The Department of Justice reported that it received nearly $170 million. Read more [https://www.bbc.com/news/business-41911961 here].
* On January 16, 2017, Rolls-Royce agreed to pay [https://www.justice.gov/opa/pr/rolls-royce-plc-agrees-pay-170-million-criminal-penalty-resolve-foreign-corrupt-practices-act $809 million] to the DOJ to settle allegations of a long-running scheme to bribe government officials in exchange for government contracts. The settlement proceeds were split between the UK, the United States, and Brazil. The Department of Justice reported that it received nearly $170 million. Read more [https://www.bbc.com/news/business-41911961 here].
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* On January 18, 2017, medical device company Orthofix International agreed to pay more than [https://www.sec.gov/news/pressrelease/2017-18.html $14 million] to the SEC to settle charges that it made improper payments to doctors at government-owned hospitals in Brazil in order to increase sales and improperly booked revenue causing the company to materially misstate financial statements from at least 2011 to Q1 2013.
* On January 18, 2017, medical device company Orthofix International agreed to pay more than $14 million to the SEC to settle charges that it made improper payments to doctors at government-owned hospitals in Brazil in order to increase sales and improperly booked revenue causing the company to materially misstate financial statements from at least 2011 to Q1 2013.
* On July 27, 2017, oil field service company Halliburton agreed to pay [https://www.sec.gov/news/press-release/2017-133 $29.2 million] to the SEC to settle charges that it violated the books and records and internal accounting controls provisions of the FCPA by failing to conduct competitive bidding and awarding lucrative oilfield services contracts to a specific local company owned by a former Halliburton employee who was a friend and neighbor of the government official who would ultimately approve the award of the contracts. Halliburton outsourced more than $13 million worth of business to the local company.
* On July 27, 2017, oil field service company Halliburton agreed to pay $29.2 million to the SEC to settle charges that it violated the books and records and internal accounting controls provisions of the FCPA by failing to conduct competitive bidding and awarding lucrative oilfield services contracts to a specific local company owned by a former Halliburton employee who was a friend and neighbor of the government official who would ultimately approve the award of the contracts. Halliburton outsourced more than $13 million worth of business to the local company.
* On September 21, 2017, telecommunications provider Telia Company AB agreed to pay [https://www.sec.gov/news/press-release/2017-171 $965 million] to settle charges that it offered and paid at least $330 million in bribes to enter the Uzbek telecommunications market. According to the SEC’s [https://www.sec.gov/litigation/admin/2017/34-81669.pdf order], Telia paid the bribes through a shell company that was controlled by an Uzbek government official who was in a position to exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan.
* On September 21, 2017, telecommunications provider Telia Company AB agreed to pay $965 million to settle charges that it offered and paid at least $330 million in bribes to enter the Uzbek telecommunications market. According to the SEC’s order, Telia paid the bribes through a shell company that was controlled by an Uzbek government official who was in a position to exert significant influence over other Uzbek officials, causing them to take official actions to benefit Telia’s business in Uzbekistan.
* On November 29, 2017, SMB Offshore, a company specializing in manufacture and design of offshore oil drilling equipment, agreed to pay [https://www.justice.gov/opa/pr/sbm-offshore-nv-and-united-states-based-subsidiary-resolve-foreign-corrupt-practices-act-case $238 million] to resolve charges that the company bribed foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq for government contracts. According to the DOJ, the company paid more than $180 million to middlemen while knowing that the money would go towards bribing officials. The scheme involved some of the highest-level executives within the company and lasted for more than a decade (1996-2012). The company entered into a [https://dlbjbjzgnk95t.cloudfront.net/0989000/989737/deferred%20pros%20agreement%2017-686.pdf deferred prosecution agreement].  
* On November 29, 2017, SMB Offshore, a company specializing in manufacture and design of offshore oil drilling equipment, agreed to pay $238 million to resolve charges that the company bribed foreign officials in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq for government contracts. According to the DOJ, the company paid more than $180 million to middlemen while knowing that the money would go towards bribing officials. The scheme involved some of the highest-level executives within the company and lasted for more than a decade (1996-2012). The company entered into a deferred prosecution agreement.  
* On December 22, 2017, Keppel Offshore & Marine Ltd. (KOM) and its U.S. subsidiary agreed to pay approximately [https://www.justice.gov/opa/pr/keppel-offshore-marine-ltd-and-us-based-subsidiary-agree-pay-422-million-global-penalties $422 million] to resolve charges that it violated the FCPA by paying millions to public officials in Brazil to win contracts with the Brazilian state-owned oil company Petrobras.  According to the [https://dlbjbjzgnk95t.cloudfront.net/0997000/997760/kom_information_-_0.pdf information] filed in the Eastern District of New York, the bribery scheme yielded $350 million in profits. KOM used agreements with consulting companies to facilitate the bribe payments to obtain business from Petrobras and conceal the bribes.  KOM is paying approximately to U.S. regulators and the remaining amount to enforcement authorities in Singapore and Brazil.
* On December 22, 2017, Keppel Offshore & Marine Ltd. (KOM) and its U.S. subsidiary agreed to pay approximately $422 million to resolve charges that it violated the FCPA by paying millions to public officials in Brazil to win contracts with the Brazilian state-owned oil company Petrobras.  According to the information filed in the Eastern District of New York, the bribery scheme yielded $350 million in profits. KOM used agreements with consulting companies to facilitate the bribe payments to obtain business from Petrobras and conceal the bribes.  KOM is paying approximately to U.S. regulators and the remaining amount to enforcement authorities in Singapore and Brazil.
* On April 30, 2018, Panasonic agreed to pay [https://www.sec.gov/news/press-release/2018-73 $143 million] to resolve charges of FPCA and accounting fraud violations involving its global avionics business. According to the SEC’s order, Panasonic offered a lucrative consulting position to a government official at a state-owned airline to induce the official to help Panasonic in obtaining and retaining $700 million in business from the airline. In addition, the SEC found that Panasonic fraudulently overstated net income by more than $82 million for the fiscal year ending June 30, 2012, by prematurely recognizing revenue on an agreement. Panasonic accomplished the fraud by backdating the agreement and providing misleading information to its external auditor.
* On April 30, 2018, Panasonic agreed to pay $143 million to resolve charges of FPCA and accounting fraud violations involving its global avionics business. According to the SEC’s order, Panasonic offered a lucrative consulting position to a government official at a state-owned airline to induce the official to help Panasonic in obtaining and retaining $700 million in business from the airline. In addition, the SEC found that Panasonic fraudulently overstated net income by more than $82 million for the fiscal year ending June 30, 2012, by prematurely recognizing revenue on an agreement. Panasonic accomplished the fraud by backdating the agreement and providing misleading information to its external auditor.
* On July 5, 2018, the SEC announced that Credit Suisse Group AG agreed to pay $30 million to the SEC and $47 million to the DOJ to resolve charges that it violated the anti-bribery and internal accounting provisions of the FCPA. According to the SEC’s order, between at least 2007 and 2013, Credit Suisse provided valuable employment to the relatives and friends of certain foreign government officials as a personal benefit to the requesting officials in order to obtain or retain investment banking business or other benefits for the bank. This quid pro quo arrangement resulted in multiple deals and substantial profits for Credit Suisse. Specifically, the SEC found that in a six-year period, Credit Suisse offered to hire more than 100 individuals referred by or connected to foreign government officials, resulting in millions of dollars of business revenue.
* On July 5, 2018, the SEC announced that Credit Suisse Group AG agreed to pay $30 million to the SEC and $47 million to the DOJ to resolve charges that it violated the anti-bribery and internal accounting provisions of the FCPA. According to the SEC’s order, between at least 2007 and 2013, Credit Suisse provided valuable employment to the relatives and friends of certain foreign government officials as a personal benefit to the requesting officials in order to obtain or retain investment banking business or other benefits for the bank. This quid pro quo arrangement resulted in multiple deals and substantial profits for Credit Suisse. Specifically, the SEC found that in a six-year period, Credit Suisse offered to hire more than 100 individuals referred by or connected to foreign government officials, resulting in millions of dollars of business revenue.
* On August 27, 2018, Legg Mason Inc. paid approximately $34 million to resolve an SEC charge that a subsidiary Permal Group Inc. partnered with Société Générale S.A., to solicit business from state-owned financial institutions in Libya by paying bribes through an intermediary.  Société Générale paid the Libyan Intermediary approximately $26.25 million for supposed “introductory” services and Lybian financial institutions purchased seven structured notes linked to funds managed by Permal that were worth approximately $950 million.  Legg Mason agreed to disgorge approximately $27.6 million of ill-gotten gains and pay $6.9 million in prejudgment interest.
* On August 27, 2018, Legg Mason Inc. paid approximately $34 million to resolve an SEC charge that a subsidiary Permal Group Inc. partnered with Société Générale S.A., to solicit business from state-owned financial institutions in Libya by paying bribes through an intermediary.  Société Générale paid the Libyan Intermediary approximately $26.25 million for supposed “introductory” services and Lybian financial institutions purchased seven structured notes linked to funds managed by Permal that were worth approximately $950 million.  Legg Mason agreed to disgorge approximately $27.6 million of ill-gotten gains and pay $6.9 million in prejudgment interest.