Archive

December 29, 2016

Kentucky-based wire and cable manufacturer General Cable Corporation will pay more than $75 million to resolve parallel SEC and DOJ investigations related to its violations of the Foreign Corrupt Practices Act.  General Cable will also pay an additional $6.5 million penalty to the SEC to settle separate accounting-related violations.  According to the SEC’s order, General Cable’s overseas subsidiaries made improper payments to foreign government officials for a dozen years to obtain or retain business in Angola, Bangladesh, China, Egypt, Indonesia, and Thailand.  The company’s weak internal controls also failed to detect improper inventory accounting at its Brazilian subsidiary, causing the company to materially misstate its financial statements from 2008 to the second quarter of 2012.  Karl Zimmer, General Cable’s then-senior vice president responsible for sales in Angola will also pay a $20,000 penalty to settle charges of knowingly circumventing internal accounting controls and causing FCPA violations when he approved certain improper payments.  SEC

December 22, 2016

Teva Pharmaceutical Industries Limited will pay more than $519 million to settle civil and criminal charges that it violated the Foreign Corrupt Practices Act by paying bribes to foreign government officials in Russia, Ukraine, and Mexico.  The SEC’s complaint alleges that Teva made more than $214 million in illicit profits by making the influential payments to increase its market share and obtain regulatory and formulary approvals as well as favorable drug purchase and prescription decisions.  SEC

December 21, 2016

Brazilian-based petrochemical manufacturer Braskem S.A. will pay $957 million in a global settlement with the SEC, DOJ, and authorities in Brazil and Switzerland to settle charges that it paid bribes to Brazilian government officials to win or retain business.  Braskem’s stock trades in the U.S.  The SEC’s complaint alleges that Braskem made approximately $325 million in profits through bribes paid through intermediaries and off-book accounts managed by a private company that was Braskem’s largest shareholder.  Bribes were paid to a government official at Brazil’s state-controlled petroleum company as well as Brazilian legislators and political party officials.  Braskem will pay $325 million in disgorgement, including $65 million to the SEC and $260 million to Brazilian authorities.  Braskem also agreed to pay more than $632 million in criminal fines and penalties.  SEC

November 17, 2016

JPMorgan Chase & Co. will pay more than $264 million to settle charges that it won business from clients and corruptly influenced government officials in the Asia-Pacific region by giving jobs and internships to their relatives and friends in violation of the Foreign Corrupt Practices Act (FCPA).  JP Morgan will pay over $130 million to the SEC, $72 million to the Department of Justice, and $61.9 million to the Federal Reserve Board of Governors.  According to the SEC’s order, investment bankers at JPMorgan’s subsidiary in Asia created a hiring program for clients that bypassed the firm’s normal hiring process.  Lucrative, career-building employment with JPMorgan was awarded to candidates as a reward to client executives and influential government officials.  During a seven-year period, JPMorgan hired approximately 100 interns and full-time employees at the request of foreign government officials, enabling the firm to win or retain business resulting in more than $100 million in revenues to JPMorgan.  SEC

December 29, 2016

Kentucky-based manufacturer and distributor of cable and wire General Cable Corporation agreed to pay a $20 million penalty to resolve the government’s investigation into improper payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand to corruptly gain business in violation of the Foreign Corrupt Practices Act (FCPA).  The company also agreed to pay approximately $55 million in disgorgement to the SEC in related proceedings for a total payout of roughly $76 million. DOJ

December 22, 2016

Teva Pharmaceutical Industries Ltd., the world’s largest manufacturer of generic pharmaceutical products, and its wholly-owned Russian subsidiary Teva LLC (Teva Russia) agreed to pay a criminal penalty of more than $283 million in connection with schemes involving the bribery of government officials in Russia, Ukraine and Mexico in violation of the Foreign Corrupt Practices Act.  According to the companies’ admissions, Teva executives and Teva Russia employees paid bribes to a high-ranking Russian government official intending to influence the official to use his authority to increase sales of Teva’s multiple sclerosis drug, Copaxone, in annual drug purchase auctions held by the Russian Ministry of Health.  Teva also admitted to paying bribes to a senior government official within the Ukrainian Ministry of Health to influence the Ukrainian government’s approval of Teva drug registrations, which were necessary for the company to market and sell its products in the country.  In related SEC proceedings, Teva agreed to pay an additional $236 million in disgorgement for a total payout of roughly $520 million in criminal and regulatory penalties.  DOJ

December 21, 2016

Odebrecht S.A., a global construction conglomerate based in Brazil, and Braskem S.A., a Brazilian petrochemical company, pleaded guilty and agreed to pay a combined total penalty of at least $3.5 billion to resolve charges with authorities in the United States, Brazil and Switzerland arising out of their schemes to pay hundreds of millions of dollars in bribes to government officials around the world in violation of the anti-bribery provisions of the Foreign Corrupt Practices Act.  It is the largest foreign bribery case in history.  DOJ

November 15, 2016

JPMorgan Chase and its Hong Kong-based subsidiary JPMorgan Securities (Asia Pacific) Limited agreed to pay a combined total of roughly $265 million to resolve foreign bribery charges relating to JPMorgan’s so-called Sons and Daughters Program.  This was a scheme in which the bank secured large business deals in China by awarding prestigious jobs to relatives and friends of Chinese government officials.  As part of the settlement, JPMorgan agreed to pay the DOJ a criminal penalty of $72 million.  JPMorgan also agreed to pay the SEC roughly $130 million to settle charges that the bank’s conduct violated the Foreign Corrupt Practices Act.  The Federal Reserve System’s Board of Governors also assessed a $61.9 million civil penalty.  Whistleblower Insider

October 24, 2016

Brazilian aircraft manufacturer Embraer S.A. will pay more than $205 million to the SEC, DOJ, and Brazilian authorities to resolve alleged violations of the Foreign Corrupt Practices Act (FCPA).  The SEC’s complaint alleges that Embraer made more than $83 million in profits as a result of bribe payments from its U.S.-based subsidiary through third-party agents to foreign government officials in the Dominican Republic, Saudi Arabia, and Mozambique to secure business in those countries.  Embraer also engaged in an alleged accounting scheme in India, in which $5.76 million was paid to an agent in India in connection with the sale of three highly-specialized military aircraft for India’s air force and the payments were falsely recorded in Embraer’s books and records as part of a consulting agreement that was not legitimate.  SEC

September 29, 2016

New York-based alternative investment and hedge fund manager, Och-Ziff Capital Management Group LLC, and its wholly-owned subsidiary OZ Africa Management GP LLC, agreed to pay a criminal penalty of more than $213 million to settle charges of violating the False Claims Act in connection with a widespread scheme involving the bribery of officials in the Democratic Republic of Congo and Libya.  According to the government, it is the first time a hedge fund has been held to account for violations of the FCPA.  DOJ