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Top FCPA Recoveries of 2023

Posted  January 19, 2024

The Foreign Corrupt Practices Act (FCPA) bars payments to foreign officials for any kind of business advantage, such as securing government contracts or other kinds of favorable business treatment.  The statute covers any form of consideration including gifts, meals, travel, and entertainment.  It also imposes strict record-keeping and internal control requirements to prevent falsifying company books and records that might otherwise disguise foreign bribes.

Enforcing the FCPA is a perennial priority for the Department of Justice (DOJ) and Securities and Exchange Commission (SEC), the agencies with primary responsibility for enforcing the statute.  Whistleblowers also play an important role in helping the DOJ and SEC uncover violations which are often difficult to detect from the outside because of the sophisticated accounting practices violators often use to disguise their illicit payoffs.

Under the SEC Whistleblower Program, those who provide information that leads to a successful SEC enforcement action may be entitled to up to 30% of the SEC’s recovery.  They may also share in any related recoveries by the DOJ and other federal agencies that result from the information the whistleblower provides the SEC.

Given the SEC’s unwavering commitment to maintaining the confidentiality of its whistleblowers, it does not disclose whether a whistleblower was involved in a particular enforcement action.  But it is apparent these days that whistleblowers have become a critical part of the government’s FCPA enforcement scheme.  In fact, last year’s blockbuster $279 million SEC whistleblower award — the largest under any whistleblower rewards program — was apparently made to an individual who provided information to the SEC that led to the $1 billion FCPA settlement by Swedish telecom giant Ericsson in December 2019.

This past year was a relatively modest one compared to past years for FCPA enforcement with only seven settlements totaling $748 million.  In 2022, there were many more settlements with the Top-10 settlements alone exceeding $2 billion.  The same was true for 2020 and 2019, with the Top-10 totals for those years amounting to more than $8 billion and $2.8 billion, respectively.

This year is already shaping up to top last year’s numbers with last week’s $220 million FCPA settlement by German-based software company SAP SE, already surpassing last year’s highest settlement.  Stay tuned on this front.

In the meantime, here is our listing of the top FCPA recoveries for 2022.

1 — Albemarle ($218M).  On September 29, North Carolina-based specialty chemicals manufacturing company Albemarle Corporation agreed to pay roughly $218 million to settle DOJ and SEC charges of violating the FCPA by paying bribes to obtain or retain contracts with state-owned oil refineries in Vietnam, Indonesia, and India.  Albemarle apparently obtained close to $100 million in profits from the scheme.

2 — Ericsson ($206M).  On March 2, Swedish-based telecom provider Telefonaktiebolaget LM Ericsson agreed to pay a criminal penalty of roughly $206 million for breaching a 2019 Deferred Prosecution Agreement (DPA) by paying bribes, falsifying books and records, and failing to implement reasonable internal accounting controls in multiple countries around the world including Djibouti, China, Vietnam, Indonesia, and Kuwait.  The DPA followed Ericsson’s criminal penalty of roughly $520 million in 2019 for similar violations.

3 — Freepoint ($98M).  On December 14, Connecticut-based commodities trading company Freepoint Commodities agreed to pay roughly $98 million to settle DOJ charges of violating the FCPA by paying bribes to Brazilian government officials to secure business with Brazil’s state-owned and state-controlled oil company, Petróleo Brasileiro S.A. – Petrobras (Petrobras).  Freepoint apparently earned over $30 million in profits from the scheme.  Freepoint also agreed to disgorge more than $7.6 million to the Commodity Futures Trading Commission (CFTC) in a related matter.

4 — Corficolombiana ($80M).  On August 10, Colombian financial services institution Corporación Financiera Colombiana agreed to pay roughly $80 million to settle DOJ and SEC charges of violating the FCPA by paying bribes to high-ranking government officials in Colombia to win a highway construction contract.  Corficolombiana apparently earned close to $30 million in profits from the contract.

5 — Philips ($62M).  On May 11, Amsterdam-based Koninklijke Philips agreed to pay roughly $62 million to settle SEC charges of violating the FCPA through illicit payments to Chinese officials to secure preferential business treatment in connection with its sales of medical diagnostic equipment.

6 — Tysers/HW Wood ($58M).  On November 20, UK-based reinsurance brokers Tysers Insurance Brokers Limited and H.W. Wood Limited agreed to pay $58 million to settle DOJ charges of violating the FCPA by bribing Ecuadorian officials to obtain and retain reinsurance business with state-owned insurance companies.

7 — Clear Channel ($26M).  On September 28, Clear Channel Outdoor Holdings agreed to pay roughly $26 million to settle SEC charges of violating the FCPA by paying bribes to Chinese government officials to obtain outdoor advertising contracts and by failing to ensure that sufficient internal accounting controls were in place.

If you have any information relating to potential FCPA violations, please contact us and we will connect you with an experienced member of our whistleblower lawyer team for a free and confidential consult.  Who knows.  Maybe you’ll be responsible for the next big thing in FCPA enforcement.

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Annual Whistleblower Insider Top Ten Lists

Every January, Whistleblower Insider looks back at the significant government enforcement actions of the past year. Our Top Ten lists highlight the biggest recoveries and significant enforcement efforts by different government actors in cases of interest to whistleblowers.
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Tagged in: Ballsy Bribes, Bribery and Bid-Rigging, Falsifying Invoices, FCPA, SEC Whistleblower Reward Program, Securities Fraud, Top 10,