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On June 4, the DOJ announced that Société Générale S.A., a Paris-based multinational bank, and its wholly owned subsidiary SGA Société Générale Acceptance N.V., agreed to pay $585 million to resolve charges in the United States and France involving bribes to Libyan officials. According to the DOJ, Société Générale will enter into a deferred prosecution agreement related to charges of conspiracy to violate the FCPA’s anti-bribery provisions. Société Générale’s subsidiary will also plead guilty in the Eastern District of New York to similar charges. Almost $293 million of the resolution will be paid to France and credited by the U.S. This is the first coordinated anti-bribery enforcement action by the DOJ and French authorities.
Société Générale admitted that it had paid over $90 million in bribes through a Libyan broker in connection with 14 investments made by state-owned financial institutions in Libya. For each transaction, Société Générale paid the Libyan broker a commission, some of which the Libyan broker then paid to high ranking Libyan officials to secure the investments for Société Générale from the state institutions. This scheme resulted in Société Générale obtaining 13 investments and one restructuring from the Libyan state institutions, and earning approximately $523 million in profits. The scheme also involved payments for the benefit of a Legg Mason subsidiary; Legg Mason resolved its FCPA issues with the DOJ on the same day.
As part of the same deferred prosecution agreement, Société Générale also agreed to pay $275 million to resolve charges arising from manipulation of U.S.-dollar and Japanese yen LIBOR.
On Thursday, March 16, 2017, Airbus Group SE (Airbus) reportedly announced that a preliminary investigation has been opened by the Parquet National Financier, France’s financial crimes investigator, regarding the same fraud, bribery, and corruption allegations being probed by the UK Serious Fraud Office (SFO). Airbus, an aircraft manufacturer based in Toulouse, France, stated that the investigations into the use of third party agents by Airbus’s civil aviation business are being conducted in tandem, and it plans to cooperate fully with both the PNF and SFO. This unusual cooperation between France and the UK could potentially lead to the first use of a deferred prosecution agreement following France’s November 2016 enactment of the Law on Transparency, the Fight against Corruption and Modernization of Economic Life, which was enacted in response to international pressure on the French government to strengthen its corruption laws following severe sanctions imposed by the U.S. Department of Justice on French companies in recent years.
For prior coverage of the SFO’s investigation, please click here.
On December 22, 2014, Alstom S.A. (Alstom), a French power and transportation company, and various subsidiaries pleaded guilty to a range of FCPA violations and agreed to pay a $772 million criminal fine, the largest on record for an FCPA case. According to DOJ officials, the bribery scheme "spanned many years, occurred in countries around the globe and in several business lines." The size of the fine was also no doubt influenced by DOJ's perception that Alstom was insufficiently cooperative, at least until several of its executives were indicted.
On December 29, 2014, the U.S. District Court for the District of Connecticut denied a motion to dismiss the indictment brought by Lawrence Hoskins, a former employee of Alstom S.A., the French power and transportation company that recently pleaded guilty to a massive scheme to violate the FCPA and agreed to a record $772 million criminal fine. Hoskins was charged in connection with activities involving a Connecticut-based Alstom subsidiary, Alstom Power, Inc. Alstom Power entered into a Deferred Prosecution Agreement as part of the broader Alstom settlement. Hoskins offered several arguments to dismiss the indictment, including that he had left Alstom (and therefore withdrawn from any conspiracy) outside the statute of limitations, that he was not actually an agent of Alstom Power and that the FCPA cannot be applied to purely extraterritorial conduct. With regard to the withdrawal claim, the court noted that the defendant bears the burden of proving some type of affirmative act of disavowal, not just a mere cessation of activity. Because the indictment did not contain facts establishing the defense and the government had not made a full proffer of its evidence, the court held that it could not determine pretrial whether the defendant had in fact withdrawn from the conspiracy. The court also held that a trial was required to resolve Hoskins's claim that he was not an agent of Alstom Power, noting that "the existence of an agency relationship is a highly factual inquiry" dependent on a number of factors. Lastly, while Hoskins claimed that the FCPA could not apply to him because he engaged in no conduct in the United States, the indictment alleged "that he used domestic wire transfers to promote the conspiracy."
- Jonice Gray Tucker to discuss “How the new administration sets the tone for 2021” at the American Conference Institute Legal, Regulatory and Compliance Forum on Fintech & Emerging Payment Systems
- Sherry-Maria Safchuk to discuss UDAAP in consumer finance at an American Bar Association webinar
- Jeffrey P. Naimon to discuss "What to expect: The new administration and regulatory changes" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Steven R. vonBerg to discuss "LO comp challenges" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss “The False Claims Act today” at the Federal Bar Association Qui Tam Section Roundtable