1. Feds Take FCPA Fight to Wall Street

    From Corporate Law Report:

    U.S. regulators just took the fight against bribery and corruption to a new arena: Wall Street. Attorneys John Goselin and Mauro Wolfe of Duane Morris explain:

    “On May 7, 2013, the U.S. Attorney’s Office for the Southern District of New York unsealed extraordinary criminal charges against two registered representatives of a U.S. broker-dealer and a high-level Venezuelan government official for engaging in a ‘Massive International Bribery Scheme.’ What makes this fraud scheme remarkable is that it involves the activities of a U.S. broker-dealer, its client, a foreign-owned and controlled bank, the Foreign Corrupt Practices Act and several suspicious transactions that potentially should have raised concerns—a perfect storm.”

    Read the post in full»

  2. Canada to Ratchet Up Cost of Foreign Bribery

    Canadian lawmakers are debating revisions to the country’s anti-corruption law that would raise the cost of bribing foreign officials. From attorney Alan Monk at Dentons:

    “[A]n amendment to the Corruption of Foreign Public Officials Act (CFPOA) has been approved by the Senate and is currently before the House of Commons. Bill S-14 is intended to address certain criticisms of the existing legislation, most notably from the Organisation for Economic Co-operation and Development (OECD), an international organization of 34 countries of which Canada is a member…

    It is important for companies operating internationally, especially in developing nations, to have appropriate policies and procedures in place to ensure compliance with the CFPOA and other applicable anti-bribery legislation throughout the world. When entering into transactions with companies that also operate internationally, it is important to ensure appropriate due diligence is conducted and appropriate language is contained in contracts relating to the transaction to minimize the possibility that your corporation will attract liability through under the CFPOA and other applicable anti-bribery legislation through its association with proposed business partners or other counterparties.”

    Read the full update, Canada To Strengthen Its Laws Against Bribery Of Foreign Public Officials – Dentons»

  3. UK To Adopt Deferred Prosecution Agreements Next Year

    UK regulators will have a new tool for fighting fraud, bribery, and money laundering when the Crimes and Courts Bill goes into effect in early 2014. How will they compare to those being used in the US? From attorneys at Dechert: 

    • “In the US, prosecutors can enter into DPAs with individuals whereas in the UK, only companies, partnerships and unincorporated associations can enter into DPAs.
    • In the UK, the range of offences to which DPAs apply are limited to economic crimes which are essentially fraud, bribery and money laundering offences. In the US, prosecutors have used DPAs more broadly including for health and safety or environmental offences.
    • In the UK, the Government has confirmed that an accused’s right to refuse to disclose information subject to legal professional privilege will continue to apply in its current form. In the US, companies were often finding themselves waiving legal privilege to demonstrate cooperation with an investigation. In 2006, the Department of Justice (the “DOJ”) put out guidance reminding prosecutors that they should seek waivers of privilege only in rare instances and only with approval from senior officials. The DOJ strengthened this guidance in 2008 and the Securities and Exchange Commission followed suit in 2010, but companies still sometimes waive privilege in an effort to show the fullness of their cooperation.
    • Further to Lord Justice Thomas’ criticism of the plea agreement entered into with Innospec Ltd in 2010 for lack of judicial input, the Act anticipates an early and active role for the UK judiciary in the negotiation, approval and variation of DPAs. In the US, DPAs do not require judicial approval.
    • The Act promotes transparency as it requires that the terms of the DPA, the declaration of the Court and the reasons set out at the preliminary and final hearings are publicly available. In the US, the DOJ has widely been criticised for a lack of transparency.”

    Read the full update, Deferred Prosecution Agreements: A Powerful New Tool for UK Prosecutors? - Dechert LLP»

  4. Former Siemens Board Member Fined $275K for Bribery

    A federal court has imposed a $275,000 fine on Uriel Sharef, former Siemens AG board member, for his role in the company’s bribery of Argentinian government officials. From Emily Stern and Tenley Mochizuki  of law firm Katten Muchin Rosenman:

    “In December 2011, the SEC sued Sharef and six other Siemens executives for their alleged participation in a complex bribery scheme that spanned from 1996 through 2007… According to the SEC’s complaint, the group paid a total of $100 million to Argentine officials, including two Presidents and several Cabinet ministers, initially to secure a $1 billion government contract to produce identity cards and, thereafter, in an attempt to reauthorize the contract following its cancellation… Sharef, who was the most senior executive named as a defendant, allegedly played a role in the scheme from the outset, including meeting with intermediaries in New York and devising a plan to funnel $27 million in bribes to Argentine officials through a sham arbitration and other fraudulent means.”

    Read the full update, SDNY Imposes Second Highest Penalty Under Foreign Corrupt Practices Act - Katten Muchin Rosenman LLP»

  5. SEC Draws Roadmap for Avoiding FCPA Prosecution

    The Securities and Exchange Commission recently announced its first non-prosecution agreement with a company accused of violating the Foreign Corrupt Practices Act. 

    The landmark agreement with Ralph Lauren Corporation, relating to bribes the company allegedly paid government officials in Argentina, establishes a clear roadmap for avoiding significant fines and penalties for companies accused of foreign bribery and corruption. From attorneys at Skadden Arps:

    “This case is a milestone in the SEC’s implementation of a broad set of policy initiatives in the last several years to encourage cooperation with its enforcement program. In addition to the development of mechanisms such as the NPA utilized here, those initiatives include similar mechanisms to recognize cooperation by individuals and a whistleblower program to reward individuals with cash payments for providing information that leads to an enforcement action.

    The SEC emphasized that the conduct at issue was discovered by the issuer as it was implementing an FCPA compliance program, and that the issuer reported it to the SEC within two weeks of discovery. Clearly, the government viewed the company’s prompt response to that discovery and immediate self-reporting as commendable. Under the precedent set by Lauren, the SEC will be looking for: (i) self-reporting followed by extensive, thorough, real-time cooperation with both the SEC and the DOJ, including complete disclosure of the violative conduct, and (ii) a thorough review of existing compliance programs, with steps to update and improve compliance measures.”

    Read the full update, SEC Announces First Non-Prosecution Agreement in an FCPA Matter - Skadden, Arps, Slate, Meagher & Flom LLP»

  6. Self-Reporting FCPA Violations Pays Off: Just Ask Ralph Lauren

    Clothing retailer Ralph Lauren will pay $1.6 million for paying approximately $600,000 in bribes to government officials in Argentina. But it could have been a lot worse, writes David Smyth of law firm Brooks Pierce: 

    “From the government’s perspective, the important part of all of this was how the payments were discovered and what Ralph Lauren did in reaction to them… Within two weeks of uncovering the payments and gifts, RLC self-reported its preliminary findings to the both the SEC and the DOJ…

    The company was subject to financial sanctions – $700,000 to the SEC and an $882,000 criminal penalty to the Justice Department – but escaped other penalties. The penalties might have been much worse if the company had waited until it was forced to respond on the government’s terms.”

    More importantly, the settlement sets a new standard for cooperating with the government. From attorney David Jenson of Leonard, Street and Deinard: 

    “For the first time, the SEC has entered into a Non-Prosecution Agreement (NPA) with a company relating to misconduct under the Foreign Corrupt Practices Act (FCPA).  The SEC decided not to prosecute Ralph Lauren Corporation for violations of the FCPA as a result of the company’s cooperation with the SEC’s enforcement division during the investigation as part of the SEC’s Enforcement Cooperation Initiative.  Announced in 2010, the initiative is designed to reward companies that come forward to report legal violations and cooperate with the SEC during the ensuing investigations.”

    Read the updates:

  7. $450 Bribes Land Driving Instructor and Examiner in Jail

    The roads in Ontario just got a little safer, writes Adrian Miedema at law firm Fraser Milner Casgrain:

    “Harvey Aitchison worked as a driving examiner for DriveTest Centre, the agency that tests Ontario drivers, in Oakville. He accepted bribes from Cyril Julius Marques, who was the owner and driver instructor of a driving school, to guarantee that that Marques’ driving students passed their Ministry of Transportation road examination.

    Marques would charge $450.00 to his driver students, $300.00 of which he would give to Aitchison.  Marques would keep the remaining $150.00.  The bribing came to light after Marques offered a DriveTest coordinator a pack of cigarettes if she assigned Aitchison to test his student.  The coordinator blew the whistle.  Aitchison resigned from his job.”

    Read the update, Employee Jailed For Accepting Bribe - Fraser Milner Casgrain LLP»

  8. Only Bribes Paid – Not Planned – Count for Sentencing Guidelines

    A former New Orleans Police Captain shouldn’t be punished for the bribes he planned, writes federal criminal defense lawyer Matt Kaiser, only the one he actually committed:

    “If you’re bribing a public official and tell him that you’re going to give him, say $10,000 for selecting your bid for a federal contract, and you pay him in two installments of $5,000, is that one bribe or two? One can see how this could be a hard question. 

    Here, though, the Fifth Circuit thought it wasn’t that tricky - in counting the number of bribes, you don’t look at all the stuff that could have happened if the full deal went through.” 

    Get the full story, When Counting Bribes For Sentencing Guidelines Purposes, You Only Count The Ones That Actually Happened - The Kaiser Law Firm PLLC»

  9. China Clarifies Anti-Bribery Rules

    China’s recent interpretation of the law criminalizing corruption “reiterates and further clarifies a number of key terms and issues under the Criminal Law of China with respect to paying bribes and punishment of this crime,” write attorneys from Morrison & Foerster. But will it help eliminate the problem?

    “On one hand, the joint issuance of the Interpretation by China’s judicial and legislative entities signals intent to streamline and intensify enforcement of China’s Criminal Law against bribery. On the other hand, it remains to be seen whether the Interpretation—or the newly issued civilian and military regulations—will have a significant effect on the giving and receiving of bribes and the day-to-day conduct of government officials. One test will be whether judicial authorities independently act to enforce the Interpretation before an incident of corruption has been so widely reported and re-blogged at the grassroots level that it becomes politically charged. A second and more telling test would be the dismissal of a high level official revealed through enforcement of the Interpretation to have accepted bribes. Significantly, the Interpretation addresses the paying but not the receipt of bribes, which can be interpreted both as representing China’s intention to more vigorously pursue instances of bribery as well as an indication that private individuals may increasingly bear the brunt of the campaign against government graft.”

    Read the full update, China’s Renewed Focus on Anti-Corruption Efforts Highlighted by a New Interpretation on Criminal Offense of Paying Bribes - Morrison & Foerster LLP»

  10. Changes in China Anti-Corruption Laws: Crackdown or Redirection?

    China appears to be broadening the scope of anti-corruption efforts to go after the foreign companies that pay bribes in addition to those who receive them. But is the government merely shifting attention away from Chinese corruption? From Reid Whitten and Thad McBride of law firm Sheppard Mullin:

    “It is hard to avoid the conclusion that the PRC is fertile ground for corruption: many of its major industries are dominated by state-owned or -controlled companies.  A tradition of gift-giving and hospitality may blur the distinction between friendly gesture and kickback.  And the sheer volume of business transacted in the country makes policing illicit exchanges for business advantages a tall order for any enforcement agency…

    China may be changing: the government recently released new guidance on its anti-bribery laws that could signal it is ready to address corruption head-on.  It is also possible, however, that China is simply seeking to punish foreign companies and distract attention from internal realities and practices that have made corruption endemic in the country.”

    Read the full update, Is China Getting Serious or Redirecting Responsibility? New guidance on Chinese Anti-Bribery Enforcement - Sheppard Mullin Richter & Hampton LLP»