Top Ten FCPA Recoveries of 2018

2018 saw substantial monetary settlements for violations of the Foreign Corrupt Practices Act (“FCPA”), which is the leading U.S. law barring bribery of foreign officials by companies subject to its reach.  Violations of the FCPA are investigated by DOJ as well as by the Securities and Exchange Commission.  The SEC has long recognized the FCPA as a high enforcement priority, and whistleblowers with knowledge of FCPA violations may be able to make a claim to the SEC Whistleblower Program.

The top FCPA settlements for 2018, based on the amount of the total payments by those charged, are listed below, with links to more information about each of the cases.

1. Petroleo Brasileiro – In the largest FCPA settlement since the law was enacted, the Brazilian petroleum company agreed in September 2018 to pay a total of $1.8 billion in penalties and disgorgement to settle allegations that it violated the FCPA by allegedly paying billions of dollars in bribes to Brazilian politicians. Petrobras then internally classified the bribes as pertinent to asset acquisition and management. While majority owned by the Brazilian government, Petrobras shares are traded on the NYSE, and the SEC found that Petrobras made false and misleading statements in filings related to a 2010 stock offering in which it raised $10 billion.
2. Société Générale – In June 2018, the Paris-based financial services company entered into a multi-faceted settlement with the U.S. which included a $585 million payment to resolve charges that it paid over $90 million in bribes to a Libyan “broker” in connection with investments SG made in Libyan state-owned financial institutions. The money paid to the “broker” was then used to pay high-level Libyan officials in the administration of former leader Muammar Gaddafi to secure investments. As a result of the bribes, SG secured multiple investments from Libyan state-owned institutions worth over $3.5 billion and earned profits exceeding $500 million.  SG also reached a $293 million settlement with French authorities, and the U.S. credited its payment of that amount against the U.S. fine.
3. Panasonic – In April 2018, the Japanese electronics company agreed to pay more than $280 million – $137 million in criminal penalties and $143 million in disgorgement – to resolve charges that its U.S. subsidiary Panasonic Avionics Corp. (“PAC”) violated the FCPA by offering a lucrative consulting position to a government official working at a state-owned airline to entice him to give PAC more business.  Panasonic also concealed payments to third-party sales agents and committed accounting fraud.
4. Credit Suisse – In July 2018 Credit Suisse agreed to pay a total of $77 million – $47 million as a criminal penalty and $30 million in disgorgement and interest – to resolve charges that it offered employment to family and friends of an influential Chinese government official in an effort to garner more business.
5. Legg Mason Inc. – In June 2018, the investment management firm agreed to a settlement valued at over $64 million to settle charges that it bribed Libyan government officials. A Legg Mason subsidiary, Permal Group Ltd., partnered with Société Générale in connection with investments in Libyan state-owned financial institutions – the same bribery scheme that also lead to the SG FCPA recovery listed at Number 2 above.
6. Sanofi – In September 2018, pharmaceutical company Sanofi agreed to pay $25 million to resolve claims that it paid bribes to government officials, and kickbacks to healthcare providers, in Kazakhstan and the Middle East, to induce those parties to purchase or prescribe Sanofi’s products.
7. Polycom – In December 2018, the California based communication products provider agreed to pay over $16 million to resolve charges that its Chinese subsidiary made payments to Chinese government officials through local distributors in exchange for the government officials securing business for Polycom. Polycom internally recorded false details in its accounting of the transactions.
8. United Technologies – In September 2018, the building systems and aerospace company agreed to pay a $13.9 million fine to resolve charges that it made payments to government officials in China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia in order to garner business selling elevators in Azerbaijan and China and aircraft engine parts in China. The payments to the government officials included lavish quid-pro-quo trips and gifts.
9. Beam Suntory – The distilled spirits company agreed in July 2018 to pay more than $8 million to resolve charges that it used third parties to make improper payments to Indian government officials, seeking to have those officials expedite its license and label registrations and purchase Beam Suntory products.  Beam them paid the fabricated and inflated invoices submitted to its Indian subsidiary by those third parties.
10. Stryker – In September 2018, the medical device company agreed to pay $7.8 million to resolve charges that it failed to maintain adequate internal controls and had inaccurate records relating to its sale of products in China, India, and Kuwait. This is not the first time Stryker has settled FCPA charges: in 2013, it paid $13.2 million.

Read More from the Constantine Cannon Whistleblower Team:

• The Foreign Corrupt Practices Act
• The SEC Whistleblower Program
• International Whistleblowers
• Our Top Ten Lists
• About the Constantine Cannon Whistleblower Team

If you have information about possible FCPA violations, and would like to talk to the whistleblower attorneys at Constantine Cannon, please contact us.

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