The Perils of Not Showing Up: Default Judgment Entered Against Two Former Siemens Executives for Record US$1.46 Million in Combined Civil FCPA Penalties


On February 3, 2014, Judge Shira A. Scheindlin of the U.S. District Court for the Southern District of New York issued a default judgment in U.S. Securities and Exchange Commission v. Sharef, et al. against two former Siemens AG executives, Ulrich Bock and Stephan Signer. Unlike other defendants in the matter, Bock and Signer never appeared before the court in the matter, and were subsequently ordered to pay a combined US$1.46 million — two of the largest Foreign Corrupt Practices Act penalties ever imposed upon individuals — for their respective roles in the well-known bribery scheme involving Siemens and government contracts in Argentina. The sheer size of the penalties begs the question — would it have been better for Bock and Signer to appear?

Dating back to activities of Siemens and its affiliates between 1996 and 2007, the U.S. Securities and Exchange Commission (“SEC”) filed suit against eight Siemens, Siemens S.A. (“Siemens Argentina”) and Siemens Business Services (“SBS”) executives in relation to their roles in “authorizing, negotiating, facilitating or concealing” bribe payments to Argentine public officials. On February 19, 2013, the former Siemens Argentina CEO Herbert Steffen succeeded in getting his case dismissed. Steffen, who appeared in the case to fight jurisdiction, successfully argued that the court lacked jurisdiction over him because the SEC did not establish that Steffen had sufficient contacts to the United States, nor would it be reasonable to require Steffen to defend himself in the United States. Three other defendants in the case, Bernd Regendantz, Uriel Sharef and Andres Truppel, settled with the SEC and paid substantially lower penalties, which amounted to US$40,000 against Regendantz, US$250,000 against Sharef and US$80,000 against Truppel.

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