Two companies have now disclosed receiving inquiries from the U.S. Department of Justice concerning Monaco-based engineering company Unaoil S.A.M. Media reports published by The Huffington Post earlier this year have implicated Unaoil in what HuffPo has called the “World’s Biggest Bribe Scandal”.
It has been quite a few months since we have heard anything big about the continuing pursuit of mortgage fraud lawsuits. However, that silence changed last week with the announcement on Friday of a $1.2 billion settlement by Wells Fargo. It was followed today by a $5 billion settlement agreement with Goldman Sachs. The Justice Department settlements concluded enforcement actions under the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) and other legal theories. It also puts the U.S. Government and financial industry one step closer to putting the financial crisis created by bad mortgages behind it.
There has been a couple news items related to the Foreign Corrupt Practices Act this week, with the Justice Department announcing a one year pilot program to encourage self-disclosure and the SEC settling its investigation of Las Vegas Sands with an enforcement action totaling $9 million.
We’ve seen two big stories concerning the Foreign Corrupt Practices Act (FCPA) come to light in the news media over the past few days. A report by The Huffington Post has alleged that “[h]undreds of major international corporations” including KBR, Rolls-Royce and Samsung hired Unaoil and that the company engaged in bribery of foreign government officials. Additionally, an anonymous internal whistleblower has accused Novartis of paying bribes in Turkey via a consulting firm to secure drugs on formularies.
The global problem of bribery isn’t going away anytime soon. Forty percent of all compliance officers reported the risk of bribery and corruption at their company will increase this year, according to the Kroll and Ethisphere Institute report released this morning: The 2016 Anti-Bribery and Corruption Report. Just 8 percent believed that their corruption risks would decrease in 2016.
Another princeling investigation has wrapped up at the Securities and Exchange Commission, although this one didn’t involve suspicions of violations of the Foreign Corrupt Practices Act by an investment bank. Instead, it was mobile technology company Qualcomm that paid $7.5 million to resolve the government probe into bribery of employees of state-owned enterprises in China.
There continues to be the release of significant FCPA news this year despite a report from law firm Miller & Chevalier noting that the number of resolved FCPA enforcement actions in 2015 was at its lowest level since 2006. The report looked at both SEC and DOJ investigations which resulted in penalties. All indications so far are that this was just a short term lull in enforcement rather than the beginning of a long term trend.
Pfizer announced an agreement in principle to resolve a long running False Claims Act lawsuit against its subsidiary Wyeth for $785 million a few weeks ahead of trial. Wyeth engaged in the conduct at issue from 2001 to 2006 according to the amended complaint. Wyeth was acquired by Pfizer in 2009.
The Department of Justice has reached the last non-prosecution agreement with a Swiss Bank as part of its voluntary disclosure program which ended in 2013. In total, the U.S. received more than $1.3 billion in penalties from the 80 banks which came forward and settled. The U.S. has received another $8 billion from 54,000 taxpayers who have come forward through the IRS Offshore Voluntary Disclosure Program.