In a stunning conclusion to the U.S. Department of Justice’s first guilty jury verdict against a corporation under the Foreign Corrupt Practices Act (FCPA), the U.S. District Court, Central District of California granted the defendants’ request to vacate the conviction of Lindsey Manufacturing Co. and its executives, and dismiss the indictment due to prosecutorial misconduct.  U.S.A. v. Aguilar, No. 10-01031 (Cal. Dec. 1, 2011). How this will impact the case going forward will be interesting to follow. As a general matter, FCPA cases settle before going to trial, and this trend will likely continue. At the same time, this case may give corporate defendants greater confidence about proceeding to trial in FCPA matters. It may force the Justice Department to scale back the enforcement tactics and vigor it has demonstrated in recent years.

The Aguilar case involved charges against Lindsey and two of its executives for conspiracy to violate the FCPA, and for substantive violations of the Act.  In its indictment, the Justice Department alleged that the defendants paid bribes through a Mexican sales representative to two high-ranking employees of an electric utility company wholly-owned by the Mexican government.  The department alleged that the bribes included a Ferrari, a yacht, and payment of the officials’ credit card bills.

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