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FCPA Blog Daily News

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Wednesday
Jun082016

Here's what a Pilot Program declination letter looks like

After Nortek and Akamai resolved FCPA enforcement actions with the SEC Tuesday with non-prosecution agreements requiring cooperation and disgorgement, both companies released declination letters issued under the DOJ's new Pilot Program.

The DOJ announced the Pilot Program in early April to encourage companies to self report potential FCPA violations and cooperate in federal investigations.

The Nortek and Akamai declination letters -- released by the companies and not by the DOJ -- should help others decide if they want to take advantage of the Pilot Program.

*     *     *

Here's the DOJ's June 3 letter from Daniel Kahn, Deputy Chief of the Fraud Section, to Nortek's outside counsel, K&L Gates:

I write regarding the investigation by the Department of Justice, Criminal Division, Fraud Section into your client Nortek, Inc. ("Nortek" or the "Company") concerning possible violations of the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1, et seq. Based upon the information known to the Department at this time,we have closed our inquiry into this matter. Consistent with the FCPA Pilot Program, we have reached this conclusion despite the bribery by employees of the Company's subsidiary in China, based on a number of factors, including but not limited to the fact that Nortek's internal audit function identified the misconduct, Nortek's prompt voluntary self-disclosure, the thorough investigation undertaken by the Company, its fulsome cooperation in this matter (including by identifying all individuals involved in or responsible for the misconduct and by providing all facts relating to that misconduct to the Department) and its agreement to continue to cooperate in any ongoing investigations of individuals, the steps that the Company has taken to enhance its compliance program and its internal accounting controls, the Company's full remediation (including terminating the employment of all five individuals involved in the China misconduct, which included two high-level executives of the China subsidiary), and the fact that Nortek will be disgorging to the SEC the full amount of disgorgement as determined by the SEC. If additional information or evidence should be made available to us in the future, we may reopen our inquiry.

*     *      *

And here's Daniel Kahn's June 6 letter to Akamai’s counsel, Ropes & Gray:

 I write regarding the investigation by the Department of Justice, Criminal Division, Fraud Section into your client Akamai Technologies, Inc. (“Akamai” or the “Company”) concerning possible violations of the Foreign Corrupt Practices Act, 15 U.S.C. § 78dd-1, et seq. Based upon the information known to the Department at this time, we have closed our inquiry into this matter. Consistent with the FCPA Pilot Program, we have reached this conclusion despite the bribery by an employee of the Company’s subsidiary in China and one of that subsidiary’s channel partners, based on a number of factors, including but not limited to Akamai’s prompt voluntary self-disclosure of the misconduct, the thorough investigation and fulsome cooperation by the Company (including by identifying all individuals involved in or responsible for the misconduct and by providing all facts relating to that misconduct to the Department) and its agreement to continue to cooperate in any ongoing investigations of individuals, the steps that the Company has taken to enhance its compliance program and its internal accounting controls, the Company’s full remediation (including promptly suspending at the start of the investigation the individual involved in the China misconduct who then resigned shortly thereafter, terminating the relationship with the channel partner involved in the misconduct, and disciplining five other employees who should have prevented other violations of the Company’s policies), and the fact that Akamai will be disgorging to the SEC the full amount of disgorgement as determined by the SEC. If additional information or evidence should be made available to us in the future, we may reopen our inquiry.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He'll be the keynote speaker at the FCPA Blog NYC Conference 2016