SEC tweaks its neither admit nor deny settlement policy, Tyco settlement approved, scrutiny alert, and for the reading stack. It’s all here in the Friday roundup.
SEC Tweaks Neither Admit Nor Deny Settlement Policy
Numerous prior posts have focused on the SEC’s controversial neither admit nor deny settlement policy. (See here for the subject matter tag).
Earlier this week, SEC Chairman Mary Jo White announced that the SEC would no longer maintain a blanket policy permitting defendants to settle SEC cases without admitting to wrongdoing. (See here for Alison Frankel’s excellent write-up at Thomson Reuters News & Insight). Frankel cites to an internal SEC email from Enforcement Division co-directors Andrew Ceresney and George Canellos as follows.
“While the no admit/deny language is a powerful tool, there may be situations where we determine that a different approach is appropriate. In particular, there may be certain cases where heightened accountability or acceptance of responsibility through the defendant’s admission of misconduct may be appropriate, even if it does not allow us to achieve a prompt resolution. We have been in discussions with Chair White and each of the other commissioners about the types of cases where requiring admissions could be in the public interest. These may include misconduct that harmed large numbers of investors or placed investors or the market at risk of potentially serious harm; where admissions might safeguard against risks posed by the defendant to the investing public, particularly when the defendant engaged in egregious intentional misconduct; or when the defendant engaged in unlawful obstruction of the commission’s investigative processes. In such cases, should we determine that admissions or other acknowledgement of misconduct are critical, we would require such admissions or acknowledgement, or, if the defendants refuse, litigate the case.”
Last month at a Corporate Crime Reporter sponsored conference Ceresney defended the neither admit nor deny settlement policy – see here.
Judge Leon Signs Off On Tyco Settlement
This previous post highlighted how Judge Richard Leon had been refusing to sign off on SEC FCPA settlements involving IBM and Tyco International. The common thread between the two enforcement actions would seem to be that both companies are repeat FCPA offenders. In 2000 IBM agreed to a permanent injunction prohibiting future FCPA violations and in 2006 Tyco agreed to a permanent injunction prohibiting future FCPA violations.
Earlier this week, Judge Leon approved a final judgment in the Tyco enforcement action that was filed in September 2012 (see here for the prior post). The final judgement contains the following paragraph.
“[For a two year period Tyco is required to submit annual reports] to the Commission and this Court describing its efforts to comply with the Foreign Corrupt Practices Act (“FCPA”), and to report to the Commission and this Court immediately upon learning it is reasonably likely that Defendant has violated the FCP A in connection with either improper payments to foreign officials to obtain or retain business or fraudulent books and records entries …”"
Final judgment in the IBM enforcement action from March 2011 (see here for the prior post) remains pending.
The Economic Times of India reports (here) that “five top executives at the Indian unit” of Bunge (a U.S. agribusiness and food company) ”have resigned amid an internal audit into possible financial irregularities.” According to the report, Bunge (the parent company) “had objected to the manner in which its Indian subsidiary paid for the factory land in Kandla. Bunge was of the view that the transaction may not be compliant” with the FCPA.
A profile (here) of “Calgary’s Top Corporate Corruption Lawyer” as well as background information on Canada’s Corruption of Foreign Public Officials Act.
As noted in this Bulletin from Blake, Cassels & Graydon, earlier this week “the amendments to the Corruption of Foreign Public Officials Act received royal assent following passage by the Parliament of Canada on Tuesday, June 18, 2013.” (See this prior post highlighting various issues raised during debate of the amendments).
A good weekend to all.