Nov. 25, 2020

The New FCPA Top 5 Settlements

This U.S. Thanksgiving holiday, we are looking back at the five largest FCPA corporate settlements measured by total penalties and disgorgements as assessed by U.S. enforcement authorities. Two of them – Goldman Sachs and Airbus – were concluded in 2020, and, at a recent ABA program, DOJ Fraud Section chief Dan Kahn called 2020 “one of the high points of Fraud Section history in terms of white collar enforcement.” This year, with its 11 corporate settlements, is the leader in FCPA penalty and disgorgement totals since the law’s enactment in 1977, drastically reshaping the top five rankings. This special issue brings together our analysis of each of those cases – Goldman Sachs, Airbus, Petrobras, Ericsson and Telia. We will return to our regular bi-weekly publication schedule on December 2.

Significant Remediation Spares Goldman Sachs a Monitor in Biggest FCPA Settlement in History

It has taken two years, but The Goldman Sachs Group has now settled allegations related to its role in the scandal surrounding sovereign wealth fund 1Malaysia Development Berhad for the eye-popping sum of $2.9 billion. But even with combined financial penalties and disgorgement that make it the largest FCPA settlement in history, the bank managed to dodge several bullets in negotiating its deal, due, perhaps, to its extensive remediation efforts. Our article analyzed the unique ways the bank has sought to shore up its compliance program – including executive compensation clawbacks – and how those changes may have influenced the deal.

Airbus Case Marks a Milestone in International Anti Corruption Cooperation

Airbus SE, one of the preeminent manufacturers of airplanes, settled allegations that it used third-party intermediaries to bribe foreign officials to win contracts all over the world and agreed to pay the largest anti-corruption penalty in history. The $3.9 billion in combined penalties will be divided among U.S., U.K. and French enforcement authorities. The first article in the Anti-Corruption Report’s series about the settlement examined the substantial international cooperation in arriving at this global settlement and how Airbus managed multiple investigations at once; the second looked at the company’s compliance failures and extracted lessons for other companies to avoid similar pitfalls. The third took a close look at Airbus’ cooperation in the parallel investigations, what it did to fix its compliance issues, and how it was able to avoid an independent compliance monitor, despite failing to self-report.

Petrobras Finally Inks Deal With SEC and DOJ to Resolve Allegations of Systemic Bribery

Petrobras, which has been at the center of a swirling storm of anti-corruption investigations in Brazil for years, found a measure of repose, at least with regards to U.S. enforcers in its historic, multilateral settlement, In 2018, the company has agreed to pay billions in disgorgement, penalties, fines and a civil settlement to the SEC, DOJ, Brazilian authorities and shareholder plaintiffs. In the first article in our series, we took a look at the surprisingly skimpy fact patterns in the DOJ and SEC papers, as well as the terms of the settlement. In the second article, we explored how and Petrobras’ various roles make the settlement a singular beast that shows how U.S. enforcers can use their discretion to come to just outcomes. And, in the final article, we discussed lessons that Petrobras’ extensive remediation holds for other companies on how to fight corruption in the upper echelons of their corporate structure.

Lessons from Telecom Giant Ericsson’s Billion-Dollar Record-Setting Deal

Continuing a trend of blockbuster cases involving non-U.S. telecommunications companies, such as the Telia case, the DOJ and the SEC announced shortly before the end of 2019 that Stockholm-based company Telefonaktiebolaget LM Ericsson (Ericsson) had agreed to pay upwards of $1 billion to resolve an FCPA matter. As we explained in our article analyzing the settlement, Ericsson’s Egyptian subsidiary pled guilty to one count of conspiracy to violate the bribery provision of the FCPA and the company agreed to retain a compliance monitor for three years, to improve its compliance program and to cooperate with the federal government in any ongoing investigations and prosecutions related to its misconduct. Meanwhile, Ericsson seems to be moving forward despite this billion-dollar blemish on its record.

Massive Telia Settlement Indicates International Cooperation Will Continue Under New Administration

Swedish telecommunications company Telia, along with its Uzbek subsidiary Coscom, agreed in 2017 to settle bribery allegations with the SEC, DOJ, Dutch and Swedish authorities for $965 million in criminal penalties and disgorgement. The company was able to obtain a DPA and avoid a monitor through extensive cooperation and remediation efforts. The facts at issue closely mirror those in VimpelCom’s settlement in 2016, but the companies were treated differently by the government. We analyzed the case and the outcome.