Jun. 22, 2022

Glencore Pleads Guilty and Agrees to Pay $1.1 Billion to Multiple Authorities, But Can It Change?

Commodity trader and producer Glencore has entered guilty pleas for conspiracy to violate the FCPA and conspiracy to commit commodity price manipulation and agreed to pay more than $1.1 billion to resolve charges relating to what the DOJ has called “staggering” bribery. The settlement, coordinated with the CFTC and the SFO, also requires the CEO and the head of compliance of the Switzerland-based company to personally certify to the DOJ that the company has met its compliance obligations at the end of the monitoring period, following through on Assistant Attorney General Kenneth Polite, Jr.’s announcement of that policy in March. The resolution, which also may be an indicator of how far the CFTC will reach as it ventures into corruption, might leave some wondering whether Glencore actually can make meaningful change given its seemingly widespread problems. See “Lessons from Telecom Giant Ericsson’s Billion-Dollar Record-Setting Deal” (Jan. 8, 2020).

Fifth Circuit Decision Could Hamstring SEC Enforcement Abilities

In a sweeping decision, a divided three-judge panel of the U.S. Court of Appeals for the Fifth Circuit held that the SEC’s administrative law tribunals are unconstitutional because they violate the Seventh Amendment right to a civil jury trial and because Congress improperly delegated to the SEC the ability to choose in which forum it brings enforcement actions. For the time being, the ruling could eliminate the SEC’s ability to use one of its important enforcement tools in cases within the Fifth Circuit’s jurisdiction. This article discusses the events and proceedings leading up to the Court’s decision, the majority’s reasoning and the views of the dissenting judge, and it includes insights from former SEC attorneys. See “Former SEC Enforcement Director Discusses Her New Role and Changes to SEC Enforcement Approach” (Dec. 15, 2021).

$78-Million SEC Resolution, But No DOJ Prosecution for Tenaris Despite Recidivism

Luxembourg-based steel pipe manufacturer Tenaris has agreed to pay the SEC more than $78 million to resolve charges relating to the payment by its Brazilian subsidiary of approximately $10.4 million in bribes to a Brazilian government official between 2008 and 2013. This follows a 2011 FCPA settlement for the company with the DOJ and SEC. This time, the DOJ has indicated that it does not intend to pursue charges. We analyze the settlement with insight from practitioners. See “Stericycle Settlement Offers Clues on the Monaco Memo in Practice” (May 11, 2022).

Ransomware and Sanctions in the Time of War

Since 2020, the number and sophistication of ransomware attacks has spiked, largely perpetuated by organized criminal groups in Russia and Eastern Europe. Against this backdrop lies the U.S. government’s position on economic sanctions implemented by the U.S. Department of the Treasury – which have escalated since Russia’s attack on Ukraine – prohibiting U.S. persons from making payments directly or indirectly to any individual, entity, group or country that is the target of such sanctions. In this guest article, Greenberg Traurig shareholders Jena Valdetero, Kara Bombach and Kyle Freeny discuss today’s most prevalent types of ransomware attacks, considerations for whether to make the ransom payment, FinCEN and OFAC’s ransomware guidance, and the U.S. government’s mitigation effort. See “Advice From a CPO on Balancing Insider Threat Management and Privacy” (May 25, 2022).

Behavioral Science in Compliance Programs: Learning From the Data and Broadening the Perspective

Often our picture of behavior is based on a picture skewed toward misconduct, Christian Hunt, founder of Human Risk, a behavioral science consultancy and training firm, argues. That, he says, creates gaps that make analyzing the data difficult. The Anti‑Corruption Report recently spoke with Hunt about his passion for reshaping the way compliance practitioners think about the human factor in their program design and execution. This second part of our article series addresses the gaps in data, learning from patterns and making compliance iterative. The first part addressed the importance of considering behavioral science in compliance and how using concepts such as social proof and salience can enhance a compliance program. See “Christopher Annand of Cargill Discusses the Importance of Generating, Gathering and Putting Training Data to Work” (Feb. 17, 2021).

Glenn Leon Joins DOJ as Chief of Fraud Section

The chief ethics officer of HPE has been tapped to head the Fraud Section at the DOJ. For insight from Leon, see “How Compliance Departments Are Responding to COVID‑19” (May 13, 2020). For coverage of the previous Fraud Section Chief, see “Dan Kahn Reflects on the DOJ’s Compliance Evolution” (May 25, 2022) and “Acting Fraud Section Chief Dan Kahn Shares Insights on How the DOJ Thinks About Compliance” (Mar. 31, 2021).

R & G Insights Labs Grows Team

Former senior editor of the Anti-Corruption Report Megan Zwiebel and former DOJ compliance counsel Hui Chen have joined the interdisciplinary legal consulting group and behavior science practice at Ropes & Gray. See “Hui Chen Suggests Companies Focus on Ethics and Metrics to Move Beyond a Rules-Based Approach to Compliance” (Nov. 15, 2017).