Category Archives: U.S. Sentencing Guidelines (USSG)

Corporate Recidivism in the FCPA Context

by Bruce E. Yannett, Andrew M. Levine and Philip Rohlik and Maxwell K. Weiss

Introduction

Among the flurry of resolutions in the final days of the Obama administration, two “repeat offenders” settled FCPA cases: Zimmer Biomet Holdings, Inc. (“Zimmer Biomet”)[1] and Orthofix International N.V. (“Orthofix”).[2]  Zimmer Biomet and Orthofix are hardly the first such “repeat offenders.”  In July 2016, Johnson Controls Inc. (“JCI”) settled an enforcement action involving activities of a Chinese subsidiary with the Securities and Exchange Commission (“SEC”),[3] and the DOJ simultaneously “declined” to bring any charges.[4]  Each of these companies was a “repeat offender” in having previously settled FCPA-related allegations.

By analyzing and comparing these three recent resolutions, this Article highlights factors that may influence whether U.S. authorities bring follow-on FCPA enforcement actions and, if so, what penalties they seek to impose.  As discussed below, companies are well advised to make concrete compliance enhancements in an effort to avoid recidivist status and the significant penalties that can accompany a second resolution. Continue reading →

The First FCPA Pilot Program Declinations: Initial Returns and Unanswered Questions

by Anouck Giovanola and Justin Spiegel

On April 5, 2016, the Department of Justice’s Fraud Section announced a new Foreign Corrupt Practices Act (“FCPA”) enforcement pilot program (the “Pilot Program”) designed to “promote greater accountability for individuals and companies that engage in corporate crime by motivating companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.”[1]  The memorandum announcing the Pilot Program sets forth four prerequisites for corporations seeking to obtain credit under the program—voluntary self-disclosure of the misconduct, full cooperation with the investigation, timely and appropriate remediation, and disgorgement of all profits related to the violation—and describes the additional cooperation credit available to companies under the terms of the Pilot Program. Continue reading →

Assessing the Fraud Section’s FCPA Pilot Program

by Jennifer Arlen

The U.S. Department of Justice (DOJ) recently launched a new pilot program (PDF: 51 KB) designed to encourage more corporations to voluntarily report their own violations of the Foreign Corrupt Practices Act (FCPA), but the program does not go far enough to achieve its goals.

The pilot program is the first time that the DOJ has offered specific benefits to corporations that self-report that are unavailable to firms that fail to disclose detected wrongdoing and cooperate only when caught. This is an important reform. Yet closer examination reveals that the benefits detailed in the pilot program are not sufficient to lead corporations to disclose significant wrongdoing that will otherwise likely remain hidden. Continue reading →