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« Happy New Year | Main | Moscow Activist Questions International Auditors »
Wednesday
Dec292010

The 2011 Watch List

The Justice Department said this year it has about 150 ongoing  FCPA investigations and prosecutions. It doesn't name those under the microscope and, while issuers probably should disclose investigations, not all of them do. Non-issuers, on the other hand, usually aren't required to say a word, so most don't.

Of the files in the DOJ's hopper, we think the list below includes more than half of them, counting individuals being investigated at some of the companies mentioned. (Tom Fox picked his favorite investigations in a great post on Monday.)

Most of the cases we've included represent something unusual -- they involve brand names, multiple defendants, high-profile news stories, unique disclosures, etc. There will also be plenty of surprises in 2011 -- the SEC is hearing from a new FCPA whistleblower every day.

In the coming year, of course, we'll cover all FCPA-related enforcement actions, as we've done in the past.

Some pending corporate investigations on our watch list include:

Alcoa -- criminal investigations of the company, its agent and some executives, growing out of allegations in a civil fraud and RICO suit filed by Bahrain's Alba.

Aon -- A U.K. subsidiary of the U.S. parent was fined £5.25 million in 2009 for failing to recognize and control the risks of overseas payments being used as bribes. U.S. investigations were first disclosed in 2007.

Avon -- The beauty-products giant in 2008 disclosed promotional payments in China that may violate the FCPA. This year, it reportedly suspended three executives in China and another in New York and expanded its internal to "a dozen or more countries."

CB Richard Ellis -- In February this year, the company self-disclosed to the DOJ and SEC potentially improper payments by employees for entertainment and gifts to Chinese government officials.

China Northeast Petroleum Corporation -- An American director who chaired the board's audit committee made a loud exit this year after the board refused to investigate alleged improper practices in China.

Drug companies -- All of them, apparently, are under scrutiny for overseas sales practices, according to unusual public warnings emanating from the DOJ during 2010.

Hewlett Packard -- It disclosed compliance problems in Russia, former CIS countries, and Serbia, potentially involving employees in Russia, Germany, Austria, Serbia, the Netherlands and perhaps other countries.

JGC -- The Japanese company is the last of the four TSKJ partners still not charged in connection with bribes in Nigeria.

Medical Device Makers -- Biomet Inc., DePuy, Stryker Corp., Zimmer Holdings Inc., Smith & Nephew plc, Medtronic Inc., and Wright Medical disclosed FCPA investigations that started in 2007 and 2008.

Morgan Stanley -- In 2009, it reported potential illegal payments in China and fired some employees allegedly involved.

PBSJ Corporation -- In December 2009, the Florida-based non-public "issuer" self-disclosed an internal investigation into potential FCPA violations, possibly in connection with road-building projects.

Schlumberger -- There were frequent press press reports during 2010 about payments in Yemen that might have violated the FCPA.

Smith & Wesson -- The biggest company involved in the shot-show case disclosed in 2010 a DOJ / SEC investigation.

Sojitz -- The Japanese trading company allegedly paid bribes to Bahraini officials, according to a civil suit filed by Alba. Like Alcoa, the U.S. intervened in Alba's suit to protect its criminal investigation into potential FCPA violations.

Team Inc. -- The oil rig operator in 2009 disclosed payments in Trinidad that might violate the FCPA.

Weatherford -- The giant oil-field services company disclosed an overseas bribery investigation in 2007 that has since expanded to include allegations of violating the Iraq oil-for-food program and possible illegal trade with Cuba, Iran, Sudan, and Syria.

FCPA-related cases in the post-indictment phase with trials pending include:

The CFE defendants (all charged in connection with alleged bribes to employees at Mexico's state-owned utility, the Comisión Federal de Electricidad):

Enrique Faustino Aguilar Noriega

Angela Maria Gomez Aguilar

Dr. Keith E. Lindsey

Steve K. Lee

Lindsey Manufacturing

The CCI defendants:

Stuart Carson

Hong (Rose) Carson

Paul Cosgrove

David Edmonds

Han Yong Kim

Flavio Ricotti

The Shot-show defendants (grouped for trial as proposed by the DOJ):

The first group: Daniel Alvirez, Lee Allen Tolleson, Andrew Bigelow, Pankesh Patel, John Benson Weir III

The second group: David Painter, Lee Wares, Jonathan Spiller, Michael Sacks, Israel Weisler

The third group: Patrick Caldwell, Stephen Giordanella, John Mushriqui, Jeana Mushriqui, John Godsey, Mark Morales

And the fourth group: Helmie Ashiblie, Yochanan Cohen, Haim Geri, Amaro Goncalves, Saul Mishkin, Ofer Paz

There are three appeals pending in FCPA-related cases that we'll be watching in 2011:

Frederick Bourke

William Jefferson

Gerald and Patricia Green

Bourke and Jefferson are free on bail pending their appeals. The Greens are serving their six-month prison terms.

Readers are welcome to let us know about other companies and people they're watching.

Reader Comments (2)

Any FDA, DePuy, and/or Stryker Whistleblower willing to talk? Would live to talk to you! lisa97080@yahoo.com
January 7, 2011 | Unregistered CommenterLisa C.
Violations by Shipping Lines, Shippers and Freight forwarders should be investigated for years of breaking laws to get business and "rewards"
January 18, 2011 | Unregistered CommenterSJP

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