Jan. 8, 2020

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

Continuing a trend of blockbuster cases involving non-U.S. telecommunications companies, the DOJ and the SEC announced shortly before the end of last year that Stockholm-based company Telefonaktiebolaget LM Ericsson (Ericsson) had agreed to pay upwards of $1 billion to resolve an FCPA matter. Its 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. See “Telefônica’s Settlement Demonstrates the Dangers of Lavish Hospitality Programs” (May 15, 2019).

AAG Benczkowski Wants Prosecutors to Be Compliance Sophisticates

At the recent American Conference Institute’s Annual International Conference on the Foreign Corrupt Practices Act held in Oxon, Maryland, Assistant Attorney General Brian Benczkowski made clear that one of the DOJ’s greatest assets is the sophistication of its prosecutors. “In citing the achievements of the past year, I would be remiss if I didn’t give credit where the credit is truly due – to the career prosecutors, law enforcement agents, and supervisors who have worked tirelessly over the past months and years to build and prosecute these cases,” Benczkowski said in prepared remarks at the conference. Chris Cestaro, the new head of the DOJ’s FCPA Unit, agreed, asserting that his Unit’s success is the result of the “incredible hard work” of the Unit’s prosecutors. “Their commitment to the job, to the mission and to doing the right thing is something I’m incredibly proud of,” he said. The Anti-Corruption Report spoke with members of the defense bar for their take on how prosecutors are approaching compliance, settlement negotiations and international cooperation. For more ACI conference takeaways, see “DOJ Enforcers Tout Transparency, the Defense Bar Responds” (Dec. 11, 2019).

DOJ Charges Former Executives of Herbalife Subsidiary in China with FCPA Violations

The DOJ’s indictment against two former executives of the Chinese subsidiary of Herbalife showcases the challenges, in some measure, that multilevel marketing companies can experience in China as they seek to navigate legal requirements there. In November 2019, the DOJ charged Yanliang “Jerry” Li, the former head and managing director of the subsidiary, and Hongwei “Mary” Yang, former head of external affairs at the subsidiary, with one count of conspiracy to violate the FCPA. Li also faces obstruction of justice charges. Both defendants are citizens of China. See “Revisiting the China Initiative: Will the Focus on FCPA Prosecutions of Chinese Companies Produce Results?” (Jul. 10, 2019).

In Latest Chapter of the Och-Ziff FCPA Saga, Court Rules That It Pay Restitution to Victims of Bribery

Shareholders affected by Och‑Ziff’s foreign bribery scheme to win mining rights in Africa qualify as victims under the Mandatory Victims Restitution Act, a federal court in New York recently held, demonstrating one type of collateral consequence of an FCPA violation. We examine the facts and the decision. See “Och-Ziff’s Settlement Offers Five Compliance Lessons for Hedge Fund Managers and Private Equity Investors” (Nov. 9, 2016).

2019 FCPA Enforcement Highlights and Trends

Enforcement of the FCPA remained aggressive in the third year of the Trump Administration. In 2019, the SEC and DOJ imposed a record setting $2.9 billion in penalties. Although recent settlements largely appear to have been initiated under the Obama Administration, the Trump Administration has maintained Obama-era anti-corruption initiatives and policies. In a guest article, Dechert attorneys Jeremy B. Zucker, Darshak S. Dholakia and Hrishikesh N. Hari, and law clerk Tanya K. Warnke analyze 2019’s enforcement actions and SEC, DOJ and CFTC policy developments and enforcement trends. See “DOJ Enforcers Tout Transparency, the Defense Bar Responds” (Dec. 11, 2019).

Demarest Advogados Welcomes Compliance Partner in São Paulo

Eloy Rizzo joins Dermarest from Koury Lopes Advogados, where he was chair of the compliance and investigations practice. For prior insight from Rizzo, see “Bolsonaro Nepotism Allegations Upend Brazilian Corruption Investigations” (Aug. 7, 2019).

August Debouzy Welcomes White Collar Partner in Paris

Astrid Mignon Colombet helps clients manage multi-jurisdictional fraud and corruption risk. For more on U.S.- French cooperation, see “How to Assess Risk Under Sapin II” (Dec. 11, 2019).