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FCPA Blog Daily News

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Monday
Jul182011

Who'll Make The Next Top Ten?

Our list of the ten biggest corporate FCPA cases of all time hasn't changed since April, when Johnson & Johnson's $70 million settlement came on as number 10.

Since then we've been considering the seventy or so ongoing investigations, wondering which names from that list might appear among the top ten FCPA settlements a year from now.

Could they include Alcoa, Avon, Hewlett Packard, and Weatherford? All have disclosed investigations that potentially involve multiple countries and practices over several years.

Or maybe Aon? It's U.K. subsidiary was already fined £5.25 million by the SFO in 2009 for failing to recognize and control the risks of overseas payments being used as bribes.

CB Richard Ellis self-disclosed to the DOJ and SEC potentially improper payments by employees for entertainment and gifts to Chinese government officials. And China Northeast Petroleum Corporation's American director who chaired the board's audit committee made a loud exit after the board refused to investigate alleged improper practices in China.

The drug companies are under scrutiny, as are medical device makers Biomet Inc., Stryker Corp., Zimmer Holdings Inc., Smith & Nephew plc, Medtronic Inc., and Wright Medical.

Then there's Paris-based Alstom. It hasn't disclosed a DOJ or SEC investigation but may be the best candidate for a top-ten spot.

Two years ago, Swiss police arrested an Alstom executive as part of a corruption and money-laundering investigation. Offices near Zurich and in Baden were raided, as were homes in several cantons.

Last year, the U.K.'s Serious Fraud Office staged the dramatic arrests of three directors of Alstom's British unit. They were suspected of paying bribes overseas to win contracts.

The SFO last week beat back a challenge against the U.K. arrests. An Administrative Court at the Queen's Bench Division ruled against Robert Purcell and Stephen Burgin, who argued that the search warrants for their homes weren't legal. They claimed a lack of reasonable grounds for the searches, "omission of relevant information, inclusion of irrelevant information, [and] overbroad and non-specific warrant." 

The investigations of Alstom may involve suspected corrupt payments in Asia and South America between 1995 and 2003. Reports in May 2008 said Swiss authorities found evidence Alstom paid around €20 million via shell companies to agents and others in Singapore, Indonesia, Venezuela and Brazil. Also mentioned were payments of $6.8 million in connection with a $45 million contract for the Sao Paolo subway and a Brazilian energy plant.

Alstom develops transport infrastructure and power plants and lines. It operates in about 100 countries with 93,500 employees. Last year it had sales of €20.9 billion.

In the United States, Alstom SA trades over the counter in the pink sheets under the symbol ALSMY.PK.

The company has been working on compliance (often a sign of a coming settlement). It's new-look code of ethics page is here.

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