This article was reprinted with permission
from FCPA Professor
SEC tweaks its neither admit nor deny settlement policy,
Tyco settlement approved, scrutiny alert, and for the reading stack. It's
all here in the Friday roundup.
SEC Tweaks Neither Admit Nor Deny Settlement
Numerous prior posts have focused on the SEC's
controversial neither admit nor deny settlement policy. (See here for
the subject matter tag).
Earlier this week, SEC Chairman Mary Jo White announced
that the SEC would no longer maintain a blanket policy permitting defendants to
settle SEC cases without admitting to wrongdoing. (See here for
Alison Frankel's excellent write-up at Thomson Reuters News &
Insight). Frankel cites to an internal SEC email from
Enforcement Division co-directors Andrew Ceresney and George Canellos as
"While the no admit/deny language is a powerful
tool, there may be situations where we determine that a different approach is
appropriate. In particular, there may be certain cases where heightened
accountability or acceptance of responsibility through the defendant's
admission of misconduct may be appropriate, even if it does not allow us to
achieve a prompt resolution. We have been in discussions with Chair White and
each of the other commissioners about the types of cases where requiring
admissions could be in the public interest. These may include misconduct that
harmed large numbers of investors or placed investors or the market at risk of
potentially serious harm; where admissions might safeguard against risks posed
by the defendant to the investing public, particularly when the defendant
engaged in egregious intentional misconduct; or when the defendant engaged in
unlawful obstruction of the commission's investigative processes. In such
cases, should we determine that admissions or other acknowledgement of
misconduct are critical, we would require such admissions or acknowledgement,
or, if the defendants refuse, litigate the case."
Last month at a Corporate Crime Reporter sponsored
conference Ceresney defended the neither admit nor deny settlement policy - see
Judge Leon Signs Off On Tyco Settlement
post highlighted how Judge Richard Leon had been refusing to sign off on SEC
FCPA settlements involving IBM and Tyco International. The common
thread between the two enforcement actions would seem to be that both companies
are repeat FCPA offenders. In 2000 IBM agreed to a permanent injunction
prohibiting future FCPA violations and in 2006 Tyco agreed to a permanent
injunction prohibiting future FCPA violations.
Earlier this week, Judge Leon approved a final judgment
in the Tyco enforcement action that was filed in September 2012 (see here
for the prior post). The final judgement contains the following
"[For a two year period Tyco is required
to submit annual reports] to the Commission and this Court describing its
efforts to comply with the Foreign Corrupt Practices Act ("FCPA"), and to
report to the Commission and this Court immediately upon learning it is
reasonably likely that Defendant has violated the FCP A in connection with
either improper payments to foreign officials to obtain or retain business or
fraudulent books and records entries ...""
Final judgment in the IBM enforcement action from March
2011 (see here
for the prior post) remains pending.
The Economic Times of India reports (here)
that "five top executives at the Indian unit" of Bunge (a
U.S. agribusiness and food company) "have resigned amid an internal audit
into possible financial irregularities." According to the
report, Bunge (the parent company) "had objected to the manner
in which its Indian subsidiary paid for the factory land in Kandla.
Bunge was of the view that the transaction may not be compliant" with the
A profile (here) of
"Calgary's Top Corporate Corruption Lawyer" as well as background information
on Canada's Corruption of Foreign Public Officials Act.
As noted in this Bulletin
from Blake, Cassels & Graydon, earlier this week "the amendments to the
Corruption of Foreign Public Officials Act received royal assent
following passage by the Parliament of Canada on Tuesday, June 18,
2013." (See this prior
post highlighting various issues raised during debate of the amendments).
A good weekend to all.
Read more articles on the FCPA by Mike
Koehler at FCPA
For more information about LexisNexis
products and solutions connect with us through our corporate site.