Friday FCPA Roundup for Week Ending July 11

Friday FCPA Roundup for Week Ending July 11

 This article was reprinted with permission from FCPA Professor

The cheerleaders fume, quotable, scrutiny alert, and for the reading stack.  It’s all here in the Friday roundup.

The Cheerleaders Fume

In the SEC’s failed enforcement action against Mark Jackson and James Ruehlen, the SEC was forced to carry its burden of proof in the context of an adversarial proceeding.  This should be celebrated as evidence that the rule of law worked.

Yet, to the cheerleaders of more FCPA enforcement regardless of enforcement theories or quality of evidence, the end result of the SEC’s failed enforcement action is something to fume about.  (See here).

Four words come to mind.  Silly, just plain silly.

Quotable

From Robert Amsterdam (here)

“My law firm has counselled entrepreneurs who have seen their companies needlessly gutted by their own lawyers, who in an act of self-preservation turn themselves into appendages of the state to work against their own clients. Even worse, we’ve seen courts seize property for years with little regard for the personal impact on the owners, while others have spent the majority of margin on FCPA compliance costs, leaving little motivation to run their business.

This is all possible thanks to the culture being spread by the war on wealth — we have been so eager to hand over vast powers to regulators and rapidly diminish the rights of those who stand accused, trusting in the flawless execution of the fight against graft and fraud.

There is such a tremendous distrust of the wealthy that politically ambitious prosecutors seek out opportunities for advancement rather than enforcement of the law. The victims tend to be individuals — not the behemoth banks who knowingly traded on debt and credit default swaps, not the industrial giants with decades of experience in bribery, nor the corporate quasi-state bodies that leech off subsidies.

Means to an end

The fight against corruption is important and commendable, and the drive to achieve greater income equality bears an undeniable moral truth. But the way we go about achieving these goals must be intelligent. Rights and due process must continue to be strong throughout the administration of justice. Then expanding opportunities for all, rather than depriving them from some, will put our society back on track for success.”

Scrutiny Alert

GPT Special Project Management Ltd, a unit of Airbus, has been under scrutiny August 2012 (see here).  The Wall Street Journal reports here:

“Airbus Group NV said … that the U.K.’s Serious Fraud Office has contacted some of its current and former employees, as well as U.K. defense ministry officials, in a long-running corruption probe into activities at one of its units. Airbus “understands that four former and current employees were recently interviewed, along with MOD [Ministry of Defence] officials, as part of a wide-ranging SFO investigation,” a spokesman said by email. The U.K.’s anticorruption regulator has for roughly two years investigated GPT Special Project Management Ltd., an Airbus unit that works with the U.K.’s defense ministry, regarding allegations relating to its business in Saudi Arabia.”

Reading Stack

See here for Gibson Dunn’s mid-year FCPA update.

“The Ruehlen and Jackson settlements, earned only after two years of hard-nosed litigation that brought the parties to the brink of trial, demonstrate that those who are willing to put the Government to its burden of proof can come out materially better for their efforts.”

See here for Gibson Dunn’s mid-year update on corporate NPAs and DPAs.

“As the debate continues over whether and how to punish companies for unlawful conduct, U.S. federal prosecutors continue to rely significantly on NPAs and DPAs.  [...]  During the first half of 2014, DOJ entered into 11 agreements to resolve a variety of alleged conduct spanning multiple DOJ divisions and sections.  The SEC entered into one agreement.  Of the 12 agreements total, 5 were NPAs and 7 were DPAs.  This figure is in line with the 12 agreements reached in the first half of 2013.  In past years, we observed the phenomenon of an uptick in NPAs and DPAs during the second half of the year, so we anticipate that this year’s tallies could match or exceed the 2013 figure of 27 agreements.”

*****

A good weekend to all.

 Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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