On August 12, 2022, in United States v. Hoskins, No. 20-842 —F.4th—, 2022 WL 330357 (2d. Cir. Aug. 12, 2022) (“Hoskins II”), a three-judge panel from the Second Circuit upheld a lower court decision to overturn the foreign bribery conviction of a former Alstom SA executive, Lawrence Hoskins. The Court concluded that the trial evidence did not support a finding that Defendant Hoskins was an “agent” of a U.S. subsidiary of the French multinational railway manufacturer Alstom (“Alstom U.S.”). While highly fact-intensive and likely subject to narrow interpretation in the future, the decision is the Second Circuit’s most recent limitation on the extraterritorial reach of the Foreign Corrupt Practices Act (“FCPA”). This follows a prior Second Circuit decision in this same case limiting the scope of the FCPA’s extraterritorial reach of conspiracy liability for certain foreign individuals acting abroad.
Continue Reading Second Circuit Upholds District Court’s Rejection of DOJ Attempt to Expand Extraterritorial Reach of FCPA Through Agency Liability
New Anticorruption Decree Modifies Regulation of Brazilian Clean Companies Act
On July 12, 2022, the Brazilian Government published Federal Decree No. 11,129/2022,[1] which amends the regulation of the Brazilian Clean Companies Act (“BCCA”), Brazil’s 2013 Anticorruption Law. The new regulation came into effect earlier this week, on July 18, 2022, and replaces Decree No. 8,420/2015, which previously regulated the application of the BCCA.
Overall, the new decree resembles past regulation in form and substance, however, it provides additional guidance on the expectations of the Controladoria Geral da União (“CGU”), which oversees compliance with the BCCA, in assessing integrity programs and the range and application of administrative fines for violations of the law. The new decree also clarifies and details procedural mechanisms for the conduct of investigations and negotiation of leniency agreements by the CGU and Brazilian public prosecutors (Advocacia Geral da União – “AGU”).[2]Continue Reading New Anticorruption Decree Modifies Regulation of Brazilian Clean Companies Act
White House Issues Strategy on Countering Corruption
On December 6, 2021, the Biden Administration issued the “United States Strategy on Countering Corruption”. It is the U.S. government’s first-ever comprehensive anti-corruption plan, and “marks a new chapter” in the country’s efforts to curb graft. If the Administration is successful in executing it, the Strategy may spur a significant increase in anti-corruption investigations and
DOJ Announces First Set of Revisions Strengthening Corporate Criminal Enforcement Policies
On October 28, 2021, Deputy Attorney General Lisa O. Monaco announced the administration’s first significant changes to the DOJ’s policies on corporate criminal enforcement, highlighting departures from Trump-era policies. The announcement focused on three corporate enforcement policy developments:
- Individuals and Corporate Misconduct: to be eligible for cooperation credit, companies must provide the DOJ with all
DOJ Indicts Founder of Nikola for Allegedly Defrauding Retail SPAC Investors
On July 29, 2021, the U.S. Attorney’s Office for the Southern District of New York unsealed a securities and wire fraud indictment against Trevor Milton, the founder and one-time chairman of Nikola Corporation (“Nikola”), a pre-revenue electric- and hydrogen-powered vehicle company which went public through a merger with a special-purpose acquisition company (“SPAC”).[1] The Indictment alleges that Milton made deceptive, false, and misleading claims regarding Nikola’s products and technology, which were directed at retail investors through social media and television, print, and podcast interviews. The SEC also filed a parallel civil action against Milton, alleging violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act, and which contends that Milton engaged in a “relentless public relations blitz” on social media and the popular press directed at “Robinhood investors” in order to inflate Nikola’s stock price.
These actions further confirm the heightened law enforcement and regulatory scrutiny of SPACs, as well as continuing interest by government authorities in protecting retail investors in so-called meme stocks.[2]
Continue Reading DOJ Indicts Founder of Nikola for Allegedly Defrauding Retail SPAC Investors
Recent Settlement Highlights Risk of Follow-On Litigation Related to FCPA Investigations
On May 12, 2021, Telefonaktiebolaget LM Ericsson (“Ericsson”) announced that it had reached an agreement to settle a claim by a competitor, Nokia Corporation, for €80 million (approximately $97 million).[1] Although Nokia’s complaint against Ericsson was not filed publicly, and therefore the details of the claim are not known, Ericsson’s announcement stated that “[t]he settlement relates to events that were the subject of a 2019 resolution with the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) of investigations into Ericsson’s violations of the U.S. Foreign Corrupt Practices Act (FCPA).”[2] This appears to be a rare instance in which a company that allegedly paid bribes to obtain business from a government entity agreed to compensate a competitor that lost out on the business opportunity as a result of the corrupt conduct, and demonstrates a further, significant risk of follow-on litigation relating to FCPA violations.
Continue Reading Recent Settlement Highlights Risk of Follow-On Litigation Related to FCPA Investigations
Colombian Corporate Regulatory Authority Expands Application of Compliance and Transparency Program Guidelines
The Colombian Corporations Commission (La Superintendencia de Sociedades) (“Superintendencia”) has issued Resolution 100-006261, which requires the overwhelming majority of companies that are supervised by the Superintendencia and engage in international transactions to adopt and implement a compliance program – called a Business Transparency and Ethics program – by April 30, 2021. The program must be designed to prevent and detect violations of anti-bribery laws, in accordance with 2016 guidance.
Continue Reading Colombian Corporate Regulatory Authority Expands Application of Compliance and Transparency Program Guidelines
D.C. District Court Rejects Privilege Claim for Post-Data Breach Forensic Report
Last month, in Guo Wengui v. Clark Hill, PLC, the United States District Court for the District of Columbia granted Plaintiff’s motion to compel production of Defendant’s third-party forensic investigation report following a cybersecurity incident.[1] The court held that the forensic report was not covered by the attorney-client privilege or the work product doctrine, providing a cautionary tale for companies conducting post-breach investigations.
Continue Reading D.C. District Court Rejects Privilege Claim for Post-Data Breach Forensic Report
A Playbook for Corporate DOJ Investigations
Corporate investigations under the Biden Administration’s Department of Justice (“DOJ”) are expected to increase in the coming months. Navigating such investigations can be complex, distracting, and costly, and comes with the risk of prosecution and significant collateral consequences for the company. Recently, Cleary Gottlieb partners and former DOJ prosecutors, Lev Dassin, Jonathan Kolodner, and Rahul
SDNY District Court Rules Foreign Sovereigns Are Not Immune From Criminal Jurisdiction In U.S. Court
On October 1, 2020, the SDNY District Court issued an important ruling in U.S. v. Halkbank, holding that foreign state-owned entities (“SOEs”) can be subject to criminal jurisdiction in the United States.
The Court denied the defendant Turkish state-owned bank’s motion to dismiss an indictment charging it with conspiracy, bank fraud, and money laundering