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  • Singapore-Based Shipyard Operator Agrees to $422 Million Penalty to Resolve Foreign Bribery Case

    Financial Crimes

    On December 22, 2017, Singapore-based shipyard operator and shipping vessel repair company, and its wholly owned U.S. subsidiary, agreed to pay a combined total penalty of $422 million to resolve foreign bribery charges by the DOJ. Authorities in the United States, Brazil, and Singapore alleged that the companies engaged in a decade-long scheme to pay tens of millions of dollars in bribes to officials in Brazil, including those of a state-owned oil company. As part of the resolution, the company entered into a deferred prosecution agreement while its U.S. subsidiary pleaded guilty, as did a former senior member of the company’s legal department. The settlement is one of the largest FCPA enforcement penalties and also represents DOJ’s first coordinated FCPA resolution with Singapore. The settlement represents a 25 percent reduction off the bottom of the applicable U.S. Sentencing Guidelines fine range due to substantial cooperation by the companies with the investigation and the taking of remedial measures, including disciplining employees and implementing an enhanced compliance system. 

    Financial Crimes FCPA Enforcement Action DOJ Bribery FCPA

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  • Deputy Attorney General Rod Rosenstein Issues Remarks on Individual Accountability for Corporate Wrongdoing

    Financial Crimes

    Deputy Attorney General Rod Rosenstein recently issued remarks highlighting the importance of the DOJ’s consistency in enforcing policies “hold[ing] individuals accountable for corporate wrongdoing.” In particular, Deputy AG Rosenstein stated that the agency should focus on improving the recent track record of bringing criminal proceedings against company employees and commented that “consistency promotes fairness and enhances respect for the rule of law.”  His remarks also touched on the Yates Memo and the FCPA Pilot Program, noting the appropriateness of focusing on individual officer or director liability.

    The comments are yet another in the steady drumbeat of calls, both internal and external to the DOJ, for DOJ enforcement strategy to hold individual corporate employees accountable for FCPA violations, although how much that strategy is being implemented remains to be seen. A recent review of DOJ corporate FCPA enforcement actions notes that the last 20 such actions have lacked related criminal charges against company employees, and going back to 2008, approximately 80% of DOJ corporate FCPA enforcement actions have lacked related criminal charges against company employees.  As Deputy AG Rosenstein’s comments concluded: “When we are serious about wanting people to follow rules, it does no good merely to post them. We need to make clear our intent to enforce the rules, with sufficient vigor that people fear the consequences of violating them.”

    Financial Crimes FCPA Enforcement Action State Attorney General DOJ FCPA Pilot Program

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  • SFO Charges Additional Individual Defendant in Connection with German-Based Company North Sea Investigation

    Financial Crimes

    The United Kingdom’s Serious Fraud Office (SFO) has reportedly charged the former chief commercial officer of a German-based company with two counts of conspiracy to make corrupt payments to assist the company with attaining or retaining contracts for freight forwarding services to the North Sea oil exploration project Jasmine. The former executive is the seventh individual charged, in addition to the company, with violations of section 1 of the UK Prevention of Corruption Act 1906 and section 1 of the Criminal Law Act 1977 for alleged conduct between January 2010 and May 2013 in connection with the Jasmine project.

    The charges follow on the heels of separate corruption charges against the company and other individuals related to an Angolan project. Last July, the SFO charged the company and seven individuals with violation of section 1 of the Prevention of Corruption Act 1906 and section 1 of the Criminal Law Act 1977 through conspiring to make corrupt payments between January 2005 and December 2006 to an agent of the Angolan state oil company, Sonangol, in order to facilitate the company’s freight forwarding business operations and contracts in Angola.

    Financial Crimes FCPA Enforcement Action UK Prevention of Corruption Act UK Serious Fraud Office

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  • SEC moves to files amended complaint in FCPA enforcement action

    Financial Crimes

    On July 14, the SEC moved for leave to file an Amended Complaint in its FCPA enforcement action against three former executives of Magyar Telekom, a Hungarian telecommunications company.  The Amended Complaint dropped allegations that the defendants bribed officials in Montenegro, while maintaining allegations of bribery in Macedonia.

    While this sort of pre-trial narrowing of the allegations is not unusual, the development is still notable for those willing to litigate FCPA cases against the government.  Magyar previously settled with both the SEC and the Department of Justice based on both sets of bribery allegations, even admitting to a detailed statement of facts regarding the alleged bribes in Montenegro in its Deferred Prosecution Agreement.  Yet those allegations evidently did not stand up to scrutiny in contested litigation against the individual defendants.  As with the SEC’s recent enforcement action against two Noble Corp. executives (one of whom was represented by BuckleySandler LLP), it is often the case that individual defendants may have more success defending FCPA charges even where related corporate entities have already admitted or settled those same charges.

     

    Financial Crimes SEC FCPA Enforcement Action

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