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Government Enforcement Exposed - "The GEE"
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28 Mar 2017 Recently Announced: DOJ Will Extend the FCPA Pilot Program

  Acting Assistant Attorney General Kenneth A. Blanco recently announced that the Department of Justice (DOJ) will extend the Foreign Corrupt Practices Act (FCPA) Pilot Program (the Program) beyond the one-year period ending on April 5, 2017. This announcement was made on March 10 at the American Bar Association’s National Institute on White Collar Crime. However, it is unknown whether this will result in a permanent implementation of the Program. Blanco specifically stated that the DOJ will soon begin evaluating the worth and efficacy of the Program, noting that “the Program will continue in full force until we reach a final decision on those issues.”   The Program began on April 5, 2016, not necessarily as a new policy initiative, but instead as a means…

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07 Mar 2016 SEC Busts Tech Company for Bribing Chinese Officials

  On Feb. 16, the SEC announced settlement of parallel civil and criminal actions involving violations of the Foreign Corrupt Practices Act (FCPA) by Massachusetts-based tech company PTC, Inc. As part of the agreement, PTC and two Chinese subsidiaries agreed to pay more than $28 million in fines, interest and disgorgement for providing Chinese officials with vacations, improper gifts and entertainment that were disguised as legitimate business expenses. Specifically, PTC agreed to pay $13.6 million in disgorgement ($11.858 million) plus interest ($1.764 million) while its two Chinese subsidiaries agreed to pay a $14.54 million fine as part of a non-prosecution agreement.   In related action, the SEC also announced its first deferred prosecution agreement (DPA) with an individual involved in an FCPA investigation. Yu Kai…

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15 Dec 2014 DOJ Offers Opinion on Successor Liability Under FCPA

The Department of Justice recently issued Opinion Release 14-02, its second release of the year regarding the Foreign Corrupt Practices Act, and it offers valuable insight for any U.S. company looking to merge with or acquire a foreign entity. The opinion request came from a U.S. consumer products company that intends to acquire a foreign manufacturer with no direct sales or distribution contracts in the U.S. In the course of its pre-acquisition due diligence of the foreign company, the U.S. entity identified a number of likely improper payments to government officials, as well as substantial accounting and recordkeeping problems. In light of these identified concerns, the U.S. company set forth a plan to take remedial pre-acquisition measures and post-acquisition integration steps. The opinion request, however,…

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06 Oct 2014 Supreme Court Passes on Esquenazi, Makes Instrumentality Test Settled Law

  The Supreme Court today declined to issue a writ of certiorari for the appellants in the case of United States v. Esquenazi.  As readers will recall from our previous post, the Esquenazi decision was noteworthy for adopting the Department of Justice’s relatively expansive definition of who qualifies as a “foreign official” under Foreign Corrupt Practices Act.  Now it appears that this definition is settled law.   While FCPA practitioners had hoped that the Supreme Court might step in to decide this issue, it appears that there was no room on the docket under the circumstances. The decision not to grant review of the Esquenazi decision is likely the result of a lack of any disagreement among the circuit courts on the issue. This is,…

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19 Aug 2014 Conviction of Private Investigators in China Further Complicates Anti-Corruption Compliance Efforts

  The recent convictions of Peter Humphrey and his wife and business partner Yu Yingzeng demonstrate the risks corporate investigation firms face in China when they obtain or pass on information on Chinese citizens. But perhaps even more alarming for U.S. companies is the effect of such prosecutions on their efforts to comply with the Foreign Corrupt Practices Act and other anti-corruption laws, as these types of convictions stand to have a chilling effect on both companies’ due diligence efforts and their internal investigations into allegations of bribery and fraud in China.   Mr. Humphrey, a British citizen, and Ms. Yu, a Chinese citizen, were convicted of trafficking in personal information of Chinese citizens between 2009 and 2013 through their company ChinaWhys. ChinaWhys, which still…

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16 Jul 2014 The Gabelli Effect: How the Supreme Court’s Decision is Impacting Enforcement Actions

  The SEC suffered another high-profile loss this month, accepting a settlement with two executives accused of bribing foreign officials without obtaining any monetary penalties.  Such “no penalty” settlements may become increasingly common for the SEC as it continues to realize the effects of the Supreme Court’s holding in last year’s Gabelli v. SEC.   The widely-publicized Noble case involved alleged violations of the Foreign Corrupt Practices Act.  The SEC accused Noble, an oil services company, of paying hundreds of thousands of dollars in bribes to Nigerian officials between 2003 and 2007 in order to obtain certain rig permits and project extensions.  The SEC further alleged that company executives Mark Jackson and James Ruehlen contributed to this bribery scheme.  Under the Noble settlement, however, Jackson…

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