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FRAUD IN PRIVATE EQUITY PORTFOLIO COMPANIES

Recently, The Deal’s Rhonda Schaffler spoke with Jeremy I. Levy, an attorney in the corporate and securities practice at Pepper Hamilton, about allegations of fraud in private equity portfolio companies. Current law puts the...more

Anti-Bribery and Compliance Challenges Ahead

In this short video, Richard Fenning, CEO, Control Risks, shares his reflections on the 2016 Control Risks “International Business Attitudes To Corruption Survey” which is available on the Control Risks website. In the interview, Richard shares his views on: *How far attitudes have come since Control Risks started publishing the survey, where often the reaction was “what on earth are you doing talking about this subject in public.” *How companies and personnel are now accepting the regulatory landscape and realizing that compliance can help people run better businesses. *How organizations are still failing to embrace compliance as as a strategic issue. *How regulators on both sides of the Atlantic are now on their “front foot” in terms of enforcement. *The dangers of not understanding the motivations behind local anti-bribery legislation and enforcement, which can be politicized in terms of who might be targeted. *How local enforcement in certain regions of anti-bribery laws can be about power and not corruption.more

This Week In Securities Litigation

The SEC continued Operation Shell-Expel this week, suspending trading in the shares of 128 OTC issuers bringing its total for the program to about 8% of the shares traded in that market. The Commission also announced another whistleblower award, this time to a former company officer in the amount of $475,000 to $575,000.more

Board Of Directors And Doing Business In China Under The FCPA

The case of GlaxoSmithKline PLC (GSK) is still resonating across the corporate globe.more

SEC And FBI Try To Ketchup To Heinz Insider Traders

In the latest development in an SEC lawsuit filed Friday, February 15, U.S. District Judge Rakoff extended a freeze on a Swiss Goldman Sachs account linked to possible insider trading in H.J. Heinz Company call options. The complaint alleges that these options were bought for $90,000 the day before the ketchup maker agreed to be bought by Warren Buffett’s Berkshire Hathaway, Inc. and Brazilian investment firm 3G Capital, giving the mystery investors $1.7 million in profits. The SEC said that the timing and size of the trades were suspicious because the account had had no history of trading Heinz stock over the last six months.more

Good News, Bad News and Missed Opportunities on “Successor Liability”

The FCPA Guidance contains good news and bad news. When I ask one of my kids which they want to hear first … they inevitably choose bad news first. With that in mind, the FCPA Guidance includes relatively bad news on successor liability. In leading up to the FCPA Guidance, I thought the DOJ and SEC “teasers” would become a reality. What was I hoping (praying) for?more

DOJ and SEC Issue Long Anticipated FCPA Guidance -- “Resource Guide” Sheds Some Light, but Gray Areas Remain

At long last, the United States Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) released their guidance on Foreign Corrupt Practices Act (“FCPA”) compliance and enforcement issues. The guidance is not a panacea for the difficult issues that global companies navigate on a daily basis, but the 120-page A Resource Guide to the U.S. Foreign Corrupt Practices Act (the “Resource Guide”) will prove to be a valuable resource. It provides a one-stop compilation of information and distillation of principles that will be helpful “from the board room to the supply room.” Please see full alert below for more information. more

HSR and Jail Time? The Importance of Being Earnest, and Getting Corporate Internal Investigations Right

Corporate and in-house counsel not accustomed to dealing with white collar defense issues can put themselves and their clients at risk when dealing with bad actors within the company. A routine merger investigation gone wrong reveals how this can happen and what to watch out for.more

Federal Criminal Lawyer Douglas McNabb of McNabb Associates - News On Current Federal Criminal Cases

July 11, 2012 - The Federal Crimes Watch Daily The Federal Crimes Watch Daily is a daily newspaper that discusses current federal criminal issues written by a federal criminal defense attorney. Topics Include: Federal Prosecutors, bid-rigging, Federal Criminal Trial, Federal Criminal Lawyer, Federal Criminal Attorney, Federal Court, Federal Law, Federal Criminal Law, Douglas C. McNabb, McNabb Associatesmore

SEC: Local Language Essential to FCPA Compliance

In yesterday's Orthofix settlement for FCPA violations in Mexico, the SEC said what some of us already knew. The use of local language is essential to "effective" FCPA compliance. This article provides examples of why it is important to conduct compliance trainings in local languages.more

Transparency International Issues UK Bribery Act Guidance on Mergers, Acquisitions and Investments

As a consequence of the entry into force of the Bribery Act 2010 (the Act) on 1 July 2011, for the first time, anti-bribery due diligence has become a necessity for companies undertaking mergers, acquisitions and investments. Transparency International UK (TI UK) has published the final version of its guidance, Anti-Bribery Due Diligence for Transactions (the guidance), to be used when undertaking anti-bribery due diligence in this context. more

U.S. Government Settles International “Trading with Enemy” Act Claims Against ING Bank

The U.S. government settled an international investigation and threatened prosecution against ING Bank N.V. in a case highlighting the international nature of modern banking as well as governmental investigations and regulatory enforcement. The U.S. passed laws prohibiting trade with certain countries. Two statutes embodying those prohibitions are the Trading with the Enemy Act and the International Emergency Economic Powers Act, both found in Title 50 of the U.S. Code. Among the nations that are currently on the prohibited list are Iran, North Korea, certain parts of Sudan, Syria, Cuba, and Burma.more

Recent DOJ Obstruction of Justice Case Highlights Importance of HSR Item 4 Compliance

Failing to comply with premerger document disclosure rules can lead to civil and criminal penalties for companies and their executives. On May 3, 2012, Kyoungwon Pyo, a senior executive at Hyosung Corporation, agreed to plead guilty and serve five months in prison for obstruction of justice for altering documents submitted to antitrust regulators in connection with a Hart-Scott-Rodino (HSR) Act premerger notification filing.more

Tampering with Documents in Connection with a Merger Investigation can Land You in Jail!

One does not usually associate the possibility of criminal penalties with the Hart-Scott-Rodino Act premerger review process. However, on May 3, 2012, the U.S. Department of Justice ("DOJ") announced that an executive of a South Korean company agreed to plead guilty to obstruction of justice charges and to serve five months in prison for altering documents filed with the DOJ and the Federal Trade Commission ("FTC") in connection with a proposed merger.more

Four To-Dos before Seeking Outside FCPA Help

General Counsel and Internal Compliance Officers get approached regularly by outside FCPA service providers. Given so many options, companies that are ready to enhance their FCPA compliance programs often do not know where to start. This article gives four recommendations of things companies should do before seeking outside assistance.more

Brand Names and More (Why the Wal-Mart Bribery Case is a Big Deal)

Will the Wal-Mart bribery case in Mexico have a lasting effect on compliance? Or is it a fleeting headline? This article discusses some reasons they this FCPA case will matter.more

Wal-Mart's Bribery in Mexico (Part 2: Insights into Specific Corruption Risks)

What is an FCPA compliance practitioner to make of the recent Wal-Mart de Mexico bribery allegations? This article lists eight insights into specific corruption risks raised by the matter.more

Mergers & Acquisitions and Anti-Corruption Compliance

As the economy improves and merger activity increases, it is important to remember the risks of FCPA liability when acquiring a company or entering into a joint venture.  Simply put, you don’t want to acquire an FCPA violation.  Companies will sometimes rush to close a deal without conducting any due diligence — that is a recipe for disaster.  On the other hand, companies alert to the risks have been able to avoid successor liability altogether or, more frequently, to obtain assurance about the scope of potential FCPA liability before the transaction is complete. Since an acquiring company may be held criminally liable for FCPA violations committed by the target company both before and after closing, pre-closing due diligence is critical to assessing risks and avoiding liability. Additionally, the party should request measures for good governance, accurate recordkeeping and anti-bribery efforts, seek audit rights, anti-corruption representations and written commitments to abide by anti-corruption laws; even if these requests aren’t honored, a record of such requests could help protect against or minimize FCPA exposure for the company. For joint ventures, the company can be held liable for the future conduct of the joint venture, but it depends on the governance proportion of the JV or majority company (e.g. board members, voting rights). Please see full article below for more information. more

What FCPA Enforcement Is Thinking

The annual National Conference on the U.S. Foreign Corrupt Practices Act (FCPA) in Washington, DC, hosted by American Conference Institute, is always a unique opportunity to hear from FCPA enforcement officials about what they are currently thinking. This year’s meeting did not disappoint. Held last week, it included noteworthy statements, some of which are provided in this article, by numerous officials. more

Global Connection - May 2011

In This Issue: - A Letter From the Editor - The Reverse Merger: Easy Way in or Illegitimate Access to U.S. Capital Markets? - Cross-Cultural Communication: Guidance for the American Negotiator - Cross-Border Mexican Trucking - Largest Indictment for an FCPA Case Gets Ready for Trial in D.C. - Snell & Wilmer Hosts In- House Counsel Global Symposium With Lawyers From Around the World - Lex Mundi Welcomes Five Senior In-House Counsel to the Lex Mundi Client Advisory Council - The United Kingdom’s Bribery Act: A New Threshold For Foreign Transaction Policies - Legal Alert - "BIS" Issues Final Rule Amending Export Control List Excerpt from "Cross Border Mexican Trucking" The North American Free Trade Agreement (NAFTA) called for cross border trucking to be phased in beginning in 1995. Congress has blocked the various attempts to implement this provision by denying funding in spending bills. One of the principal arguments against cross-border Mexican trucking has been that Mexican trucks on American roads would be unsafe. In March 2009, Mexico expressed its displeasure with the failure of the U.S. to comply with its NAFTA obligation to phase-in cross-border trucking by imposing retaliatory tariffs. Mexico's retaliatory tariff list consists of more than 99 items, which include some of America's largest exports to Mexico. This has meant significant tariffs on billions of dollars worth of U.S. exports. Please see full newsletter below for more information.more

Keep the wolves of embezzlement away.

Information on how to keep an embezzlement from taking place.more

Guilty Plea for Altering HSR Documents

The U.S. Department of Justice (DOJ) has provided a jarring reminder of the penalties for dishonesty in Hart-Scott-Rodino (HSR) filings. On August 15, the DOJ announced that Nautilus Hyosung Holdings Inc. (NHI) agreed to plead guilty to criminal obstruction of justice for altering documents submitted with an HSR filing. NHI agreed to pay a $200,000 fine, but the DOJ can still pursue criminal prosecution—and potential incarceration—of an NHI executive. Companies must make HSR filings with the DOJ and Federal Trade Commission (FTC) and observe a waiting period before closing to enable the agencies to evaluate the likely impact of the transaction on competition. Item 4(c) of the HSR notification form requires parties to provide copies of “all studies, surveys, analyses and reports which were prepared by or for any officer or director . . . for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth or expansion into product or geographic markets.” Such “4(c) documents” provide the agencies with their first insight into the potential impact of a transaction on competition. NHI, a manufacturer of automated teller machines (ATMs), made a filing in August 2008 in connection with its proposed acquisition of Trident Systems of Delaware (Trident), a rival ATM manufacturer. According to the plea agreement filed in the U.S. District Court for the District of Columbia, an unnamed NHI executive altered 4(c) documents to “misrepresent and minimize the competitive impact of the proposed acquisition on markets in the United States and other statements relevant and material to analyses . . . by the FTC and DOJ.” Please see full alert below for more information.more

Compliance in Brazil: Current and Future Perspectives

Compliance in Brazil: Current and Future Perspectivesmore

Trade & Manufacturing Alert - April 2011

In This Issue 01 WTO Appellate Body Report On U.S. Antidumping And Countervailing Duties Against China Upholds Many Of The Panel’s Legal Findings But Reverses On Two Key Issues 02 President Obama Visits Brazil, Seeks Closer Trading Relationship 03 China’s 12th Five-Year Plan For National Economic And Social Development Provides A Glimpse Of China’s Industrial Focus In The Near Term 04 USTR’s 2011 Trade Policy Agenda Targets Job Growth 04 U.S. Importers Face Jail Time And Massive Fines For Illegally Avoiding Antidumping Duties 05 Commerce’s New Rule On Remedial Tariffs Can Affect Corporate Acquisitions 06 News of Note 08 Contacts Please see full Alert below for further information.more

Director's Liability

Insolvancy Related iability of Director's Under Indian Companies Act 1956

A company is legally separate and distinct from its members. It is ultimately an artificial creation and it acts through its servants or agents. The decisions of a majority of its members in general meetings are regarded as the acts of the corporation. The majority acts through the Board of Directors. Board of Directors, as a whole, is generally delegated all powers of the management and it may sub-delegate any of these powers to individuals directors or other servants and managers. There is a relationship akin to agency between the corporation and its board as well as the servants or agents that are delegated with specific responsibilities. These Corporate executives are assigned with immense power which must be regulated not only for public good but also for the protection of those whose investments are involved. A director must however exercise his expert skill and knowledge for the company. He should exercise skill and care in carrying out their managerial functions. In addition to fiduciary duties there are some statutory duties also that have been provided under the Companies Act, 1956. A director has to perform his functions with reasonable care. If the directors unable to perform their duties they can be held to be liable under the provisions of this Act. At the time of winding up of a company the liquidator has a vital role to play. But since the directors are the key officers of the company they are also having some liabilities which are as under:more

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