Is the U.S. Department of Justice going soft? Not likely.
The agency recently levied what it described as a “discounted $2 million penalty” for violations of the Foreign Corrupt Practices Act on Nordam Group because a more substantial fine could have put the company out of business. From law firm Morrison & Foerster:
“The bribes totaled almost $1.5 million over nine years, securing nearly $2.5 million in profits. Nordam assented to a non-prosecution agreement, and will pay what the DOJ described as a discounted $2 million penalty—a relatively modest sum as FCPA penalties go.
The misconduct was not a novel fact pattern, and the terms of the non-prosecution agreement generally follow the norm, but one feature of the Nordam case is notable. Perhaps signaling the DOJ’s willingness, in certain circumstances, to set a penalty that will punish but not destroy, the DOJ noted that it set the penalty at $2 million because Nordam had demonstrated that a larger penalty would ‘substantially jeopardize’ the company’s viability…
Nordam’s cooperation and the DOJ’s decision that Nordam did not deserve to be put out of business saved Nordam. The ‘Nordam discount’ likely will be reserved for exceptional circumstances, and companies should not assume that they would receive such a discount should they find themselves facing FCPA liability.”
Read the full update, Cooperating and Showing Hardship Yields “Discounted” $2 Million Penalty for FCPA Violations - Morrison & Foerster LLP»