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Foreign Official Hiring Program Results in $264 Million in Fines and Penalties

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A large investment bank agreed to pay over $264 Million including $130 Million to the SEC, $72 Million to the Justice Department, and nearly $70 Million to the Federal Reserve Board, for violating the Foreign Corrupt Practices Act by giving jobs in return for investment banking business.  The SEC charges that the respondent bypassed normal procedures to hire friends and relatives of senior officials at government entities in order to secure investment banking assignments.  The SEC asserts that those responsible for the program knew its illegality and intentionally misled internal audit and compliance reviews.  According to the SEC, the referral program resulted in the hiring of 200 employees over a 7-year period and generated in more than $100 Million in revenue.

OUR TAKE:  This is the second major FCPA case in the last several weeks (see https://cipperman.com/2016/10/04/large-hedge-fund-manager-ceo-pay-413-million-settle-bribery-charges/).   The SEC intends to review FCPA compliance and bring enforcement actions with firms seeking business with foreign government entities.

https://www.sec.gov/litigation/admin/2016/34-79335.pdf

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