Officers & Directors Found Not Responsible for Company’s FCPA Violations

A derivative shareholder lawsuit against the officers and directors of Tidewater Inc., which paid more than $15 million in 2010 to settle charges of Foreign Corrupt Practices Act violations, was dismissed earlier this month by a federal judge. From law firm Morrison & Foerster:

“… Plaintiff Jonathan Strong filed a shareholder derivative lawsuit based on Tidewater’s alleged violations of the FCPA and the Securities Exchange Act of 1934. Strong, a Tidewater shareholder, brought the action against certain officers and members Tidewater’s Board of Directors alleging that they breached their fiduciary duties… 

Strong alleged that as a result of these actions, Tidewater had to pay multi-million dollar penalties to US regulators, suffered damages to its reputation, and incurred significant expenses in connection with investigating the illegal activities. The complaint sought injunctive relief related to Tidewater’s internal controls and asserted a claim for damages on Tidewater’s behalf against the officer and director defendants for “breaches of fiduciary duties, abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment.” Defendants moved to dismiss, among other grounds, on the basis that Strong failed to make a formal demand on Tidewater’s Board prior to filing his lawsuit. In a pointed opinion, Judge Milazzo unequivocally agreed with defendants.”

Read the full update, FCPA Derivative Suit Dismissed: Complaint Devoid of Specific Allegations Falls Woefully Short - Morrison & Foerster LLP»