An often-overlooked provision in the financial reform legislation now before Congress would allow employee whistleblowers to receive a reward of up to 30% of the fines collected by the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) from corporations who violate the Foreign Corrupt Practices Act (“FCPA”). We have reported in this blog on several occasions the increase in FCPA enforcement by the government in recent years. The passage of a bill containing this proposed whistleblower provision could lead to even more government enforcement, as well as multi-million dollar awards to whistleblowers.
Proposed Whistleblower Provision Could Dramatically Increase FCPA Risk | Sheppard Mullin Richter & Hampton LLP – JDSupra
May 13, 2010 By Leave a Comment
Top cop: SEC may not delay civil cases | Reuters
May 5, 2010 By Leave a Comment
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The head of the Department of Justice‘s Criminal Division said the U.S. Securities and Exchange Commission might not have to delay civil enforcement actions so prosecutors can pursue related criminal cases.
Lanny Breuer, assistant attorney general for the criminal division, expects the Justice Department to develop a closer working relationship with SEC enforcement staff, saying the Obama administration “cares very deeply about comprehensive approaches” toward enforcement.
“Just because there’s a civil action … and a parallel criminal action, the days are gone where the civil action will necessarily be stayed until the criminal action is over,” Breuer said after a speech at the Council of Foreign Relations in New York. He did not discuss specific cases.
A Justice Department spokeswoman said Breuer was referring to recent instances in which courts have elected not to put SEC civil cases on hold while criminal investigations are ongoing.
The timing of parallel enforcement activity has surfaced recently in the sprawling hedge fund insider trading case centered on the Galleon Group hedge fund.
It may also become an issue for the SEC’s civil fraud lawsuit against Goldman Sachs Group Inc, which was filed two weeks before news surfaced of a Justice Department criminal investigation.
Prosecutors face a higher burden of proof and tougher rules on discovery than investigators pursuing civil cases.
The existence of a criminal probe could also cause individuals to assert their Fifth Amendment right against self-incrimination were the SEC to seek testimony.
via Top cop: SEC may not delay civil cases | Reuters.
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Gibson Dunn, Linklaters Tackle Alleged Bribery Case for HP
April 16, 2010 By Leave a Comment
Gibson, Dunn & Crutcher and Linklaters have nabbed the work advising tech giant Hewlett-Packard as German authorities investigate whether HP paid nearly $11 million in bribes to secure a tech contract with the Russian government, according to a source familiar with the matter.
The investigation itself concerns allegations that HP officials in 2003 paid $10.9 million to win a $47 million contract to build sophisticated computer systems for the office of the prosecutor general of the Russian Federation, according to The Wall Street Journal. Guess what sort of cases that office works on, according to the WSJ? Criminal prosecutions, including many corruption cases.
German investigators are looking at the possibility that HP used a network of subsidiaries all over the world, including in the U.S., to conceal the bribes, the Journal says. The U.S. Securities and Exchange Commission could start its own investigation if the German probe turns up evidence that HP violated the Foreign Corrupt Practices Act, which bans U.S. companies from bribing foreign officials, according to the Journal. The SEC could also investigate whether HP failed to adequately disclose the existence of the German probe in its public filings.
via Gibson Dunn, Linklaters Tackle Alleged Bribery Case for HP.
Daimler to pay $200 mln, end bribery probe-report | Reuters
Daimler AG (DAIGn.DE) agreed to pay about $200 million and two units will enter guilty pleas to resolve a U.S. investigation into whether the German automaker paid bribes to secure overseas business, Bloomberg News said on Friday, citing people familiar with the accord.
Daimler, U.S. Department of Justice the U.S. Securities and Exchange Commission representatives had no immediate comment or were not immediately available for comment.
According to the report, the settlement would resolve both a Justice Department probe into whether Daimler violated the Foreign Corrupt Practices Act by bribing government officials, and also a related SEC civil probe.
The charges against the units were not immediately clear.
Government lawyers submitted the settlement for approval by U.S. District Judge Richard Leon, the report said, citing the people.
via Daimler to pay $200 mln, end bribery probe-report | Reuters.