Financial Instrument Bid-Rigging/Antitrust Resolutions

This quarter, two New York-based broker-dealers, Banca IMI Securities Corp. (“Banca IMI”) and Industrial & Commercial Bank of China Financial Services, LLC (“ICBCFS”), pleaded guilty to criminal antitrust charges for their involvement in a bid-rigging conspiracy surrounding pre-release American Depository Receipts (“ADRs”).  Larry Meyers, the former head of Banca IMI’s securities lending desk, also pleaded guilty to related charges.

ADRs represent ordinary shares of publicly traded companies that are exclusively listed on foreign stock exchanges
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Deputy Assistant Attorney General Matt Miner Delivers Remarks at the American Bar Association, Criminal Justice Section Third Global White Collar Crime Institute Conference

On June 27, 2019, Deputy Assistant Attorney General Matt Miner delivered remarks at the ABA Criminal Justice Section’s Third Global White Collar Crime Institute, discussing the importance of international cooperation and transparency in white-collar investigations.  Miner emphasized the increasing importance of collaboration between authorities in cross-border investigations, including investigations into bribery, investment schemes, computer hacking, and complex money laundering.  Further, Miner discussed the impact of increased cross-border activity on the availability of evidence, stating that
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Merrill Lynch Commodities Inc. Enters into Corporate Resolution and Agrees to Pay $25 Million in Connection with Commodities Trading Practices

On June 25, 2019, DOJ announced that Merrill Lynch Commodities Inc. (“MLCI”), a global commodities trading business, entered into a non-prosecution agreement in connection with DOJ’s investigation into the market for precious metals futures contracts.  DOJ alleged that precious metals traders employed by MLCI provided misleading information to the futures markets by placing orders for futures contracts that the traders intended to cancel before execution.  DOJ maintained that these canceled orders created a misleading impression
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TechnipFMC Plc and U.S.-Based Subsidiary Resolve Foreign Bribery Case

On June 25, 2019, DOJ announced that TechnipFMC plc (“TFMC”), a publicly traded company in the United States and a global provider of oil and gas services, and its wholly owned U.S. subsidiary, Technip USA, Inc. (“Technip USA”), agreed to pay combined criminal penalties of more than $296 million to resolve foreign bribery charges with authorities in the United States and Brazil.  According to DOJ’s press release, between at least 2003 and 2013, Technip USA
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Walmart Inc. and Brazil-Based Subsidiary Agree to Pay $137 Million to Resolve Foreign Corrupt Practices Act Case

On June 20, 2019, officials announced that multinational retailer Walmart, Inc. (“Walmart”) and Brazilian subsidiary WMT Brasilia S.A.R.L. (“WMT Brasilia”) agreed to pay combined penalties of $137 million to resolve DOJ’s investigation into alleged FCPA violations in several countries.  The government’s allegations involved the companies’ anti-corruption controls in relation to due diligence on third-party intermediaries.  Parent company Walmart entered into a three-year non-prosecution agreement (“NPA”) with the government and agreed to a two-year independent corporate
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CEO of Public Commodities Trading Company Charged in $66 Million Accounting Fraud Scheme

On June 5, 2019, Venkata Meenavalli, the CEO of a publicly traded commodities trading company known as Longfin Corp. (“Longfin”), was indicted on charges of securities fraud.  Authorities maintain that Longfin purportedly engaged in sophisticated commodities trading and so-called “cryptocurrency” transactions, including “blockchain-empowered solutions.”  Prosecutors have alleged that the commodities transactions reported by Longfin were actually “sham” events between Longfin and separate entities that Meenavalli controlled, and that Longfin reported in its public filings with
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Opioid Manufacturer Insys Therapeutics Agrees to Enter $225 Million Global Resolution of Criminal and Civil Investigations

On June 5, 2019, authorities announced a $225 million global resolution of criminal and civil investigations into opioid manufacturer Insys Therapeutics, Inc. (“Insys”) in connection with the company’s marketing of the fentanyl spray Subsys.  Insys entered into a five-year deferred prosecution agreement, and operating subsidiary Insys Pharma, Inc. agreed to plead guilty to five counts of mail fraud.

According to charging documents, Insys used “speaker programs” to funnel bribes and kickbacks to practitioners in exchange
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Department of Justice Issues Guidance on False Claims Act Matters and Updates Justice Manual

On May 7, 2019, the Civil Division released guidance to the Department’s False Claims Act (“FCA”) litigators explaining how to credit defendants who cooperate during an FCA investigation.  Under the policy, defendants can earn cooperation credit by voluntarily disclosing misconduct unknown to the government, cooperating in an ongoing investigation, and/or undertaking remedial measures.  The guidance explains that cooperation credit will generally take the form of a reduction in the damages multiplier and civil penalties assessed,
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Criminal Division Announces Publication of Guidance on Evaluating Corporate Compliance Programs

On April 30, 2019, DOJ’s Criminal Division released updated guidance for federal prosecutors to assist in the evaluation of corporate compliance programs, updating and expanding upon similar guidance issued in February 2017.  The updated guidance provides an expanded discussion of the hallmarks of well-designed compliance programs in relation to risk assessments, policies and procedures, training, confidential reporting and investigation processes, as well as the management of third-party relationships.  Additionally, the document provides white-collar prosecutors with
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Two Global Financial Institutions Pay More than $2.3 Billion to Resolve Multi-Jurisdiction Sanctions-Related Investigations

On April 9, 2019, officials announced that London-based Standard Chartered Bank (“SCB”) reached resolutions with a half-dozen Federal, State, and UK agencies (DOJ, the Manhattan District Attorney’s Office (“DANY”), the Federal Reserve Bank, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), the New York Department of Financial Services, and the U.K. Financial Conduct Authority) arising out of U.S. dollar transactions involving Iran and other sanctioned countries.  Following a six-year investigation, SCB, inter alia,
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Former Chief Financial Officer at Publicly Traded Transportation Company Charged with $245 Million Securities and Accounting Fraud Scheme; Two Other Defendants Previously Indicted Charged with Additional Offenses

On April 3, 2019, DOJ officials announced the indictment of the former CFO of publicly traded trucking company Roadrunner Transportation Systems, Inc. (“Roadrunner”) on numerous charges in connection with an alleged securities and accounting fraud scheme that resulted in the loss of over $245 million in shareholder value.  According to the indictment, former CFO Peter Armbruster and two former controllers of Roadrunner’s Truckload operating segment, Mark Woglsand and Bret Naggs, carried out a scheme to
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Fresenius Medical Care Agrees to Pay $231 Million in Criminal Penalties and Disgorgement to Resolve Foreign Corrupt Practices Act Charges

On March 29, 2019, DOJ officials announced a non-prosecution agreement (“NPA”) with Germany-based Fresenius Medical Care AG & Co. KGaA (“Fresenius”) to resolve a seven-year DOJ and SEC investigation into FCPA violations.  Fresenius admitted to paying bribes to public officials to obtain or retain business, failing to implement reasonable internal accounting controls, and failing to maintain accurate books and records in connection with its activities in several countries in Africa and the Middle East between
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Patrick Ho, Former Head of Organization Backed by Chinese Energy Conglomerate, Sentenced to Three Years in Prison for International Bribery and Money Laundering Offenses

On March 25, 2019, Patrick Ho was sentenced to three years in prison for his role in a scheme to bribe officials of Chad and Uganda.  Ho, the former head of a non governmental organization, admitted to paying the bribes to obtain business advantages for CEFC China Energy Company Limited (“CEFC China”), an international energy and banking conglomerate.  The schemes involved a $2 million bribe to the then-president of Chad to obtain oil rights, as
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Lumber Liquidators Enters into Corporate Resolution for Securities Fraud and Agrees to Pay $33 Million Penalty

On March 12, 2019, Lumber Liquidators Holdings Inc. entered into a deferred prosecution agreement with DOJ and agreed to pay $33 million for filing materially false and misleading statements to investors based on its compliance with formaldehyde regulations.  According to the DPA, in 2014, U.S. flooring suppliers notified the company that its Chinese laminate products were emitting high levels of formaldehyde.  Despite visiting the Chinese laminate supplier and learning that the supplier could not demonstrate
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Mizrahi-Tefahot Bank LTD. Admits Its Employees Helped U.S. Taxpayers Conceal Income and Assets

On March 12, 2019, Mizrahi-Tefahot Bank Ltd. (“Mizrahi-Tefahot”), one of Israel’s largest banks, entered into a deferred prosecution agreement (“DPA”) with DOJ to settle a cross-border tax investigation.  Mizrahi-Tefahot admitted that, from 2002 until 2012, its employees helped U.S. customers evade U.S. taxes by concealing ownership and control of assets at the bank.  As part of the DPA, Mizrahi-Tefahot agreed to pay $195 million, which included restitution to the United States, disgorgement of fees paid
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