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Richard L. Cassin Publisher and Editor

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Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

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Friday
Oct282016

Och-Ziff and Embraer join our Top Ten Disgorgement List

Two recent enforcement actions included disgorgements to the SEC that are among the ten biggest FCPA disgorgments of all time.

As part of its $412 million resolution with the DOJ and SEC in late September, hedge fund manger Och-Ziff Capital Management Group (and its affiliate OZ Africa Management GP LLC) agreed to disgorge about $199 million to the SEC.

Och-Ziff's disgorgement was the second biggest in an FCPA case.

And this week, Embraer SA agreed to disgorge up to about $98 million as part of a $205 million resolution with the DOJ and SEC.

In a litigation release, the said SEC said Embraer could receive up to a $20 million credit "depending on the amount of disgorgement it will pay to Brazilian authorities in a parallel civil proceeding in Brazil."

The SEC didn't publish a final amount that reflected the credit for disgorgement in the Brazil enforcement action.

But in a separate statement, Embraer said it reached a settlement with authorities in Brazil for about $20 million. Of that, about $18.5 million is disgorgement, Embraer said.

Assuming Embraer receives a credit of $18.5 million against the SEC's order to disgorge $98 million, then the company will disgorged about $79.5 million to the SEC.

That would be the tenth biggest disgorgement in an FCPA case.

So far in 2016, three companies have landed on the Top Ten Disgorgement List. Joining Och-Ziff and Embraer is VimpelCom. In February, it disgorged $167.5 million to the SEC as part of its $397.6 million FCPA resolution wtih the DOJ and SEC.

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Disgorgement, according to contributing editor Marc Alain Bohn, is a remedy authorized by the Securities Exchange Act of 1934 that's "used to deprive wrong-doers of their ill-gotten gains and deter violations of federal securities law."

Disgorgement first appeared in an FCPA enforcement action in 2004 when ABB Ltd disgorged $5.9 million to resolve books and records and internal controls offenses.

Since then the SEC has used disgorgement in most of its FCPA-related enforcement actions.

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Here are the current top ten FCPA-related corporate disgorgements. All amounts also include pre-judgment interest:

1.  Siemens $350 million in 2008

2. Och-Ziff $199 million in 2016

3.  KBR $177 million in 2009

4.  VimpelCom $167.5 million in 2016

5.  Alcoa $161 million in 2014

6.  Total S.A. $153 million in 2013

7.  Snamprogetti $125 million in 2010

8.  Technip $98 million in 2010

9.  Daimler $91.4 million in 2010

10. Embraer $79.5 million in 2016

*     *     *

For comparison, here's our current list of the top ten FCPA enforcement actions.
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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.