FCPA

January 19, 2017

Nevada-based gaming and resort company Las Vegas Sands Corp. agreed to pay a $6.96 million criminal penalty to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) in connection with business transactions in China and Macao. According to admissions by Sands, certain Sands executives failed to implement internal accounting controls to ensure the legitimacy of payments to a business consultant who assisted Sands in promoting its brand in China and Macao and to prevent the false recording of those payments in its books and records. Sands continued to make payments to the consultant despite warnings from its finance staff and an outside auditor that the business consultant had failed to account for portions of these funds. In addition, Sands terminated the finance department employee who raised concerns about the payments. Sands also agreed to pay a civil penalty of roughly $9 million to settle related SEC charges for a total payout of roughly $16 million. DOJ

January 17, 2017

United Kingdom-based manufacturer and distributor of power systems for the aerospace, defense, marine and energy sectors Rolls-Royce plc agreed to pay nearly $170 million as part of an $800 million global resolution to investigations by DOJ and U.K. and Brazilian authorities into a long-running scheme to bribe government officials in exchange for government contracts in violation of the Foreign Corrupt Practices Act. According to company admissions, Rolls-Royce paid more than $35 million in bribes through third parties to foreign officials in various countries including Thailand, Brazil, Kazakhstan, Azerbaijan, Angola and Iraq in exchange for those officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce and affiliated entities. DOJ

January 12, 2016

Warsaw, Indiana-based medical device manufacturer Biomet will pay more than $30 million to resolve SEC and DOJ investigations into the company’s repeat violations of the Foreign Corrupt Practices Act.  Biomet first faced FCPA charges from the SEC and entered into a deferred prosecution agreement with the DOJ in March 2012 when it also agreed to pay $22 million to settle both cases.  As part of the SEC settlement, Biomet agreed to retain an independent compliance consultant to review its FCPA compliance program.  After the settlement, while implementing recommendations from the consultant, Biomet discovered potential anti-bribery violations in Mexico and Brazil.  The company notified the monitor and the SEC in 2013.  The SEC’s order finds that Biomet continued to interact and improperly record transactions with a known prohibited distributor in Brazil, and used a third-party customs broker to pay bribes to Mexican customs officials to facilitate the importation and smuggling of unregistered and mislabeled dental products. SEC

January 13, 2017

Chilean chemicals and mining company Sociedad Química y Minera de Chile (SQM) agreed to pay a criminal penalty of more than $15 million in connection with payments to politically-connected individuals in Chile in violation of the Foreign Corrupt Practices Act. According to the government, SQM made donations to dozens of foundations controlled by or closely tied to Chilean politicians with influence over the government’s mining plans in Chile, a key segment of SQM’s business. SQM also admitted to falsifying its books and records to conceal payments to vendors associated with politicians, logging them as consulting and professional services SQM never received. In total, SQM admitted having paid nearly $15 million between 2008 and 2015 to vendors despite having no evidence any goods or services were actually received. SQM also agreed to pay $15 million to settle related charges with the Securities and Exchange Commission, for a total payment of $30 million. DOJ

January 12, 2017

Indiana-based manufacturer of orthopedic and dental implant devices Zimmer Biomet Holdings Inc. agreed to pay a $17.4 million criminal penalty in connection with a scheme to pay bribes to government officials in Mexico and for violations of the internal controls provisions of the Foreign Corrupt Practices Act involving the company’s operations in Mexico and Brazil. By failing to require appropriate due diligence and documentation and contracts for payments to third parties, Biomet allowed its Mexican subsidiary Biomet 3i Mexico S.A. de C.V. to pay bribes to Mexican customs officials through customs brokers and sub-agents so 3i Mexico could import contraband dental implants into Mexico. Importing those products into Mexico violated Mexican law because they lacked proper registration or labeling. In related proceedings, the company also agreed to pay the SEC disgorgement of $6.5 million including pre-judgment interest and $6.5 million as a civil penalty. DOJ

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