Top FCPA Recoveries of 2021

We wish we could provide a list of the Top Ten FCPA recoveries of 2021.  But, in 2021, there were just four FCPA settlements announced by government enforcement agencies.  Following back-to-back years with billions of dollars in recoveries under the Foreign Corrupt Practices Act in 2020 and 2019 momentum has, unfortunately, stalled.

The FCPA prohibits the payment of bribes to foreign officials made with the intent to further business interests.  The SEC and DOJ are tasked with investigating FCPA violations.  Whistleblowers who report violations of the FCPA to the SEC Whistleblower Program may be eligible to collect a whistleblower reward of up to 30% of the government’s recovery.  A whistleblower need not be a U.S. citizen in order to be eligible for a whistleblower reward.

According to Stanford Law’s 2021 FCPA Year in Review, the steep drop in FCPA matters can be partially attributed to a significant decrease in enforcement.  The DOJ and SEC filed 18 enforcement actions in 2021.  The Stanford report claims this figure marks the lowest number of enforcement actions in a decade—considerably below the ten-year average of 36.  The six FCPA matters initiated in 2021 represent a decline of nearly 50 percent compared to 2020.

As to why, there is no doubt that the pandemic stalled out some enforcement efforts.  Because cases take years to develop, it is no surprise that we are just now seeing some of the impacts of the global shutdown.  We may also be seeing the late results of administration priorities, with less energy behind anti-corruption efforts during the Trump years leading to lower results.

That may soon change.  Despite the downturn in FCPA recoveries over the past year, President Biden identified the fight against corruption as a core national security interest of the United States.  The Biden administration outlined a comprehensive approach for how the United States will work domestically and internationally to prevent, limit, and respond to corruption.  The shift in approach could lead to an uptick in FCPA recoveries.

Without further ado, here are the top (and, saving us some effort, the only) four FCPA recoveries of 2021:

1. Credit Suisse – Credit Suisse Group AG and VTB Capital plc top the list this year. They will collectively pay more than $481 million to resolve charges related to the financing of hundreds of millions in loans to the government of Mozambique and an entity owned by that government, Empresa Moçambican de Atum S. A. (EMATUM).  Credit Suisse, which pleaded guilty to defrauding investors and entered into a settlement agreement with the SEC, will pay nearly $475 million to U.S. and international authorities, as well as restitution to individual investors.  As part of its guilty plea, Credit Suisse admitted to numerous wrongdoings, including that it made material misrepresentations and omissions in statements to investors about the planned use of loan proceeds; that it paid roughly $50 million in kickback payments to a Credit Suisse subsidiary; and that it paid $150 million in bribes to government officials.  Credit Suisse’s payment consists of a $99 million payment to the SEC, a $247 million criminal monetary penalty to the U.S., and $200.7 million to the United Kingdom’s Financial Conduct Authority.
2. Deutsche Bank – Coming in at number two, Deutsche Bank AG agreed to pay over $130 million to resolve charges that the financial services company violated the FCPA and engaged in a commodities fraud scheme. The SEC charged that Deutsche Bank made payments to foreign officials, their relatives, and their associates as third-party intermediaries and consultants to obtain and retain global business.
3. Amec Foster Wheeler – UK-based global engineering company Amec Foster Wheeler Energy Limited, a subsidiary of John Wood Group plc, has agreed to pay more than $40.7 million in criminal fines, disgorgement, and interest. The settlement agreement stipulates that Amec Foster Wheeler enter into a three-year deferred prosecution agreement to settle foreign bribery charges involving a $190 million contract from state-owned Petróleo Brasileiro S.A. (Petrobras) to design a gas-to-chemicals complex in Brazil. Amec Foster Wheeler allegedly conspired with others to pay bribes in order to win the contract, earning at least $12.9 million in profit as a result.
4. WPP – London-based advertising company WPP plc will pay $19 million in disgorgement, interest, and penalties to resolve allegations that it violated the FCPA. The SEC charged that WPP acquired advertising agencies and failed to ensure that these subsidiaries implemented appropriate internal controls or respond to repeated earning signs and internal complaints about activities including payments to government officials in India, China, Brazil, and Peru. 

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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