Skip to main content
Menu Icon Menu Icon
Close

InfoBytes Blog

Financial Services Law Insights and Observations

Filter

Subscribe to our InfoBytes Blog weekly newsletter and other publications for news affecting the financial services industry.

  • SFO fines shipping and logistics company over $1 million for bribery scheme

    Financial Crimes

    On June 3, the UK Serious Fraud Office (SFO) announced that it had fined a shipping and logistics company £850,000 (approximately $1.08 million) for bribes paid to secure contracts in Angola. The SFO started investigating the company in September 2014 and announced in July 2016 that it had charged the company and seven individuals with making corrupt payments. The company pleaded guilty in 2017. The SFO found that executives had bribed an agent of the Angolan state oil company to obtain $20 million worth of shipping contracts.

    Financial Crimes UK Serious Fraud Office Anti-Corruption Bribery

    Share page with AddThis
  • UK SFO declines to prosecute individuals in British aviation company and British pharmaceutical company corruption investigations

    Financial Crimes

    The U.K.’s Serious Fraud Office (SFO) announced on February 22 that it was ending two long-running corruption-related investigations – one of a aviation company and the other of a pharmaceutical giant – without bringing charges against any individuals. 

    In 2017, the aviation company paid $650 million to settle an SFO investigation into a government kickbacks scheme. In connection with the resolution of the SFO’s charges, the aviation company admitted to bribing government officials in Russia, India, China, Nigeria, and elsewhere in exchange for contracts worth hundreds of millions of pounds. The aviation company also paid $170 million to resolve related charges brought by the DOJ, with the DOJ later charging five individuals for their alleged participation in the bribery scheme.

    Although the SFO announced in 2014 that the pharmaceutical company was under investigation, the SFO never disclosed the subject matter of that investigation. In its only announcements about the case, the SFO has noted simply that the investigation concerned the company’s “commercial practices.” In 2012, the pharmaceutical company had paid $3 billion in the U.S. to settle charges brought by U.S. prosecutors concerning alleged off-label marketing, and in 2014 was convicted in China of bribing doctors and hospitals to improve sales, but it remains unknown whether the SFO’s investigation related to one of these known issues or something different. 

    The SFO director explained in a public statement that the decision to decline prosecution of any individuals in connection with these investigations was because “there is either insufficient evidence to provide a realistic prospect of conviction, or it is not in the public interest to bring a prosecution in these cases.”

    Financial Crimes UK Serious Fraud Office Anti-Corruption DOJ Bribery Of Interest to Non-US Persons

    Share page with AddThis
  • UK Serious Fraud Office ends first deferred prosecution agreement with a South African bank

    Financial Crimes

    On November 30, the United Kingdom’s Serious Fraud Office (SFO) announced the successful conclusion of the deferred prosecution agreement entered into in 2015 with a South African bank, which had followed allegations that payments were made by two former employees to bribe members of the Tanzanian government. This deferred prosecution agreement was the first ever entered into by the SFO and also marked the first use of Section 7 of the Bribery Act of 2010—failure of commercial organizations to prevent bribery—by any U.K. prosecutor. Upon entering into the deferred prosecution agreement in 2015, the bank had also settled related charges with the SEC. See previous Scorecard coverage here.

    The DPA required the bank to pay fines and disgorgement totaling almost $26 million, pay an additional $6 million to compensate the government of Tanzania, and hire an external compliance consultant. On the basis that the bank had fully complied with the terms of the agreement, the SFO announced that it had advised the relevant UK court that it will conclude the DPA without restarting proceedings against the bank. The SFO’s announcement also promised that a “Details of Compliance” document outlining how the bank met the terms of the deferred prosecution agreement would be published on the SFO’s website in the future. Because this is the SFO’s first deferred prosecution agreement, this document could be very useful guidance for companies to understand what measures will be expected to satisfy the SFO. 

    Financial Crimes UK Serious Fraud Office DPA

    Share page with AddThis
  • Oil company executives found guilty in U.K. of money laundering

    Financial Crimes

    According to the U.K Serious Fraud Office (SFO), the former CEO and CFO of an oil and gas exploration and production company were sentenced in the UK on October 29 for their parts in a kickback scheme in Nigeria. The former CEO was sentenced to up to six years in prison, and the CFO to up to five years. The executives were found to have recommended that the company enter a $300 million deal with an oil field partner in Nigeria without telling the company’s board that they would personally receive 15 percent of the deal’s value from the partner. They then laundered more than $45 million, using some of the proceeds to buy luxury Caribbean real estate. The SFO thanked the U.S. DOJ for its assistance with the investigation.

    Financial Crimes UK Serious Fraud Office Anti-Money Laundering

    Share page with AddThis
  • UK Serious Fraud Office recovers bribe from diplomat from Chad

    Financial Crimes

    In what the UK’s Serious Fraud Office (SFO) is calling a first, a £4.4 million recovery from a corruption case will be returned overseas. The SFO prevailed in a trial before the UK High Court and recovered the money from Chadian diplomats, including the wife of the former Deputy Chief of the Chadian Embassy to the United States who was received the money in the form of discounted shares of a Canadian oil company. The company also paid “consultancy fees” to diplomats through a front company called “Chad Oil” set up five days before the agreements with the diplomats. In exchange for the payments, the company received exclusive development rights in Chad.

    The case has continued for some time—the company paid a C$10 million criminal fine in Canada in 2013. After the company was taken over by a UK corporation, the U.S. DOJ filed an In Rem. complaint and later requested SFO assistance.

    This recovery will be “transferred to the Department for International Development who will identify key projects to invest in that will benefit the poorest in Chad.”

    Financial Crimes UK Serious Fraud Office Anti-Corruption

    Share page with AddThis
  • SFO confirms opening of criminal investigation into aerospace and defense group

    Financial Crimes

    On January 18, the Serious Fraud Office (“SFO”) confirmed the opening of an investigation of an aerospace and defense group and its subsidiary into alleged bribery, corruption, and money laundering. The UK-based company that designs and makes products in the aerospace and defense industries, stated that the investigation followed a voluntary report from the subsidiary relating to “two specific historic contracts.” According to the company, the first of these contracts was awarded before the company took over the business group being investigated, while the second contract occurred after the acquisition. The company stated that they will fully cooperate with the SFO’s investigation and provide further updates.

    Financial Crimes UK Serious Fraud Office Bribery Anti-Corruption Anti-Money Laundering

    Share page with AddThis
  • Dutch Oilfield Company Agrees to Pay DOJ $238 Million; Two Former Executives Charged by UK SFO

    Financial Crimes

    On November 29, a Dutch oilfield company entered into a three year deferred prosecution agreement with the DOJ to settle allegations that the company paid bribes to secure contracts in various countries around the world. Under the agreement, the company agreed to pay a total of $238 million, including a $500,000 criminal fine and forfeiture of $13.2 million. The next day, the UK Serious Fraud Office announced that two former company executives had been charged with conspiracy to make corrupt payments in connection with government contracts in Iraq between 2005 and 2011. 

    Earlier this month, two different former executives pleaded guilty in US federal court to paying bribes to government officials in Brazil, Angola, and Equatorial Guinea. Click here for FCPA Scorecard’s prior coverage of these guilty pleas. The company has been involved in a sprawling bribery investigation involving enforcement officials in the United States, the UK, Brazil and the Netherlands. The DOJ closed its investigation in 2014 before reopening it in February of 2016. Click here to view previous FCPA Scorecard coverage of the company's investigation.

    The company’s deferred prosecution agreement states that the company did not receive voluntary disclosure credit even though it voluntarily disclosed the conduct to the DOJ, because the disclosure was untimely as it took place “approximately one year” after the company learned of the information. It also states that the company received full cooperation credit because it conducted a “thorough internal investigation, [made] regular factual presentations” to the DOJ, “voluntarily [made] foreign-based employees available for interviews in the United States, [produced] documents to the United States from foreign countries” and expedited parts of the internal investigation. The deferred prosecution agreement goes on to detail the remedial measures that the company has taken to improve its compliance function, which included hiring a third party to design and implement a new compliance program, reduce the number of third party agents engaged by the company, and terminate relationships with questionable third parties. It goes on to explain that all of these factors weighed in the DOJ’s decision not to seek a guilty plea by the company. This information provides insight into the DOJ’s expectations for receiving disclosure and compliance credit.

    Financial Crimes DOJ UK Serious Fraud Office

    Share page with AddThis
  • DOJ Charges Five Individuals With FCPA Violations Involving a British Luxury Car Company

    Financial Crimes

    On November 7, the DOJ unsealed FCPA charges against five individuals for their alleged participation in a foreign bribery scheme involving a British luxury car company and its U.S. subsidiary. Of the five individuals, one was indicted while the remaining four pleaded guilty for their roles in an alleged scheme to pay bribes to a Kazakhstan official in order to secure a supply contract for a gas pipeline from Kazakhstan to China. The charges and guilty pleas were unsealed in Ohio federal district court. 

    These charges follow on the heels of the company’s January 2017 settlement with DOJ in which the company agreed to a three-year deferred prosecution agreement and agreed to pay $170 million to resolve charges that it conspired to violate the anti-bribery provisions of the FCPA around the world. As part of the DOJ settlement, the company agreed to continue to cooperate fully with the DOJ’s investigation, including its investigation of individuals. The DOJ settlement comprised just a fraction of the $800 million total penalty the company agreed to pay as part of a global resolution related to the corrupt conduct. 

    Of the four guilty pleas, three individuals (a former executive of the company, a former employee of the company, and an executive at an international engineering consulting firm) pleaded guilty to one count of conspiracy to violate the FCPA. The fourth individual (a former senior executive of the company) also pleaded guilty to one count of violating the FCPA in addition to conspiracy. The indicted individual, a former CEO of the company's intermediary, was charged with one count of conspiracy to violate the FCPA and seven counts of violating the FCPA, along with various money laundering charges. 

    The DOJ’s announcement noted the “significant cooperation and assistance” from the UK SFO and Brazil law enforcement. This continues the increased trend of DOJ receiving and then highlighting cooperation efforts by its international counterparts.

    Financial Crimes DOJ FCPA UK Serious Fraud Office

    Share page with AddThis
  • Directors Plead Guilty in U.K. to Angola Bribe Scheme

    Financial Crimes

    On September 15, a logistics and shipping company, and six of its current and former directors pleaded guilty in the U.K. to charges of conspiracy to pay bribes in Angola. The trial against a seventh man charged in the conspiracy started this week in London. The U.K.’s Serious Fraud Office charged the company and the seven individuals last year with allegedly paying bribes when the company was seeking to obtain freight forwarding services contracts with the Angolan state oil company between January 2005 and December 2006.

    Financial Crimes UK Serious Fraud Office

    Share page with AddThis
  • SFO Director Urges Department to Compete With DOJ on Home Turf

    Financial Crimes

    In a September 4 speech, Serious Fraud Office (SFO) Director David Green urged the SFO to lead anti-corruption enforcement efforts against UK-connected companies, warning that “if we take our foot off the pedal . . . , others will fill the void.” Green noted that the DOJ “is not shy about enforcing the [FCPA] against foreign companies,” and emphasized that seven of the top ten highest-dollar FCPA cases since 2008 were brought against non-American companies. Green said that “it is surely right that the UK should lead enforcement in relation to UK companies or companies with strong connections here,” because it not only “demonstrates our commitment to the level playing field,” but it also “ensures that hefty financial penalties go to UK public coffers rather than elsewhere.”

    Financial Crimes UK Serious Fraud Office DOJ FCPA

    Share page with AddThis

Pages

Upcoming Events