DOJ, SEC Announce Anti-Bribery Enforcement Actions Against U.S. Metals Firm

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On January 9, the SEC and the DOJ announced the resolution of parallel FCPA enforcement actions against a major U.S. extractive industries firm and one of its subsidiaries. The actions related to improper payments to officials of a foreign government, and to a “middle man” serving as an intermediary to secure contracts to supply a government controlled aluminum plant. The SEC’s cease and desist order asserts the parent firm lacked sufficient internal controls to prevent and detect bribes made through foreign subsidiaries, which were improperly recorded in the parent company’s books and records as legitimate commissions or sales. The order directs the parent firm to disgorge $175 million, $14 million of which would be satisfied by forfeiture required in the parallel DOJ action. As a result of that action, the parent company pleaded guilty to one count of violating the FCPA’s anti-bribery provisions and consented to entry of a judgment that requires the company to pay a criminal fine of $209 million and forfeit $14 million. The plea agreement also requires the parent firm to maintain and implement an enhanced global anti-corruption compliance program, and both the parent and subsidiary companies must cooperate with the DOJ in its continuing investigation of individuals and institutions that were involved in the subject activities.