Eletrobras’ Many Facets: Victim, Wrongdoer, State-Owned Entity, Issuer and More

The SEC’s $2.5-million settlement with Brazil’s Centrais Elétricas Brasileiras S.A. (Eletrobras) demonstrates, once again, that the U.S. government is willing to aggressively use the FCPA’s accounting provisions to pursue foreign corruption. In an unusual twist, Eletrobras was fined for a scheme where it was both involved in paying the bribes and was the bribe recipient. The company’s status as both a Brazilian state-owned entity and a U.S. issuer, as well as its role in the continually unfolding fallout from the Operation Car Wash investigation further complicated the matter and likely contributed to both the SEC’s settlement terms as well as the DOJ’s declination. See our three-part series on takeaways from the Petrobras settlement: “Deal With SEC and DOJ to Resolve Allegations of Systemic Bribery” (Oct. 17, 2018); “State-Owned Entity, Victim and Perpetrator” (Oct. 31, 2018); “Lessons on Preventing Top-Down Corruption” (Nov. 14, 2018).

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