FCPA Professor https://fcpaprofessor.com A Forum Devoted to the Foreign Corrupt Practices Act Tue, 02 Jun 2026 14:19:03 +0000 en-US hourly 1 https://wordpress.org/?v=7.0 https://fcpaprofessor.com/wp-content/uploads/2024/10/cropped-fcpalogo-1-32x32.png FCPA Professor https://fcpaprofessor.com 32 32 22955078 Gaining Comfort With Uncertainty https://fcpaprofessor.com/gaining-comfort-with-uncertainty-2/ Tue, 02 Jun 2026 14:17:55 +0000 https://fcpaprofessor.com/?p=38167
Thus, as highlighted below, an initial learning curve associated with the FCPA is gaining comfort with uncertainty.

For starters, the FCPA is a principle-based statute and not a rule-based statute and because of that learning about the FCPA (let alone conforming one’s conduct to the FCPA) is more difficult.

The analogy is as follows: as a driver it is easier to conform your conduct to a rule-based law (the speed limit is 65) or a principle-based law (the speed limit is to drive reasonable at all times).



Next, when studying and analyzing the FCPA one may have to confront the question of what does the FCPA mean? There should be a simple answer, but in many instances there is not.

Obviously, the FCPA means what legal authority (such as the statute, judicial decisions, and legislative history) say it means, but the problem here is that there is not much judicial authority of precedent construing the FCPA. Moreover, in much of the legal authority that does exist, judges have found various FCPA elements vague or ambiguous (see here for the prior post).

Thus, in learning what the FCPA means (or at least what the FCPA enforcement agencies say the FCPA means) one very soon encounters non-legal sources of information such as actual FCPA enforcement actions (i.e. prosecutorial common law – see here for the prior post), and DOJ/SEC FCPA Guidance including in the form of DOJ opinion procedure releases. The problem with this “stuff” of course is that it is not legal authority.

Combine the above dynamics and in many (but certainly not all) instances of FCPA scrutiny and enforcement one can ask two similar, yet distinct, questions. Indeed, the learning point here is to recognize how the questions are distinct.

The first is whether, given the DOJ’s and SEC’s enforcement theories, the conduct at issue can expose a company to FCPA scrutiny and an FCPA enforcement action? This question can often be answered yes.

The second question is whether Congress in passing the FCPA intended to capture the alleged conduct at issue and whether a court would find the alleged conduct in violation of the FCPA? This question is often unknown.

Obviously business organizations subject to the FCPA are most interested in the answer to the first question. However, at the risk of being called old-fashioned, the answer to the second question is important as well.

Once FCPA learners are over this hump, analysis of the statute begins.

Anything of value – well that is a fairly uncertain term and FCPA enforcement actions have included allegations about golfing, flowers, karaoke bars as well as payments as low as $4.

Foreign official – who the heck is a foreign official? The FCPA statute does not definitely answer this question, legislative history conflicts with current DOJ and SEC interpretations, and even the only judicial decision of precedent on this issue contains a non-exhaustive factor-based test (see here for the prior post).

Obtain or retain business – what does that mean? Well, it certainly means things of value offered or provided to secure foreign government contracts, but beyond that it depends. As highlighted in this article, the government has an overall losing record in cases outside the context of procurement and even in the U.S. v. Kay case which held that certain payments outside the context of foreign government could fall within the FCPA’s anti-bribery provisions the court pointed out that there “there are bound to be circumstances” in which such payments merely increase the profitability of an existing profitable company and thus, presumably does not assist the payer in obtaining or retaining business.  The court specifically stated as follows.
“If the government is correct that anytime operating costs are reduced the beneficiary of such advantage is assisted in getting or keeping business, the FCPA’s language that expresses the necessary element of assisting in obtaining or retaining business would be unnecessary, and thus surplusage – a conclusion that we are forbidden to reach.”

In short, uncertainly there as well.

Next, one encounters the FCPA’s exception for facilitation payments. If one has trouble understanding these provisions, don’t feel bad – federal court judges do as well (see here for the prior post).

Then one reads that the exception specifically mentions “obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country” but also learns that many FCPA enforcement actions concern payments in connection with “obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country.”

Just remember those two questions discussed above.

From there, it is on to the so-called “reasonable and bona fide” business expenditures affirmative defense and if there was ever an uncertain term in the FCPA “reasonable” would be it (a term which also appears frequently in the FCPA’s books and records and internal controls provisions).

And then it is on to the third-party payment provisions and learners think they “get it” that business organizations can be exposed to FCPA scrutiny and enforcement based on the conduct of various third parties. Yet, the FCPA (at least as written) is not a strict liability statute, but has a knowledge element embedded in it. However, the FCPA’s definition of knowledge is muddy.

Then one learns that to negate this knowledge element, business organizations often engage in compliance best practices. Yet, the term “best practices” is inherently uncertain. Do due diligence one might say, but what is due diligence and how much due diligence is enough? The FCPA does not answer this question.

And then of course it is on to the FCPA’s books and records and internal controls provisions – likely one of the most generic legal provisions one can find. Indeed, as stated by a federal court judge:
“The main problem with the internal accounting controls provision of the FCPA is that there are no specific standards by which to evaluate the sufficiency of controls; any evaluation is inevitably a highly subjective process in which knowledgable individuals can arrive at totally different conclusions.”

I could go on and on, but I trust you get the point.

When learning about the FCPA, one must first gain comfort with uncertainly. Often times the answers to questions are not legal answers, but risk tolerance answers which are often business judgments.

So when I leave students (whether spending an entire semester with them or just a few days) I often close by saying “well, at least you are now confused on a higher level.”

And that too is a component of learning.

]]> Many people, when first learning of the Foreign Corrupt Practices Act, may expect to learn bright-line rules and may be initially disappointed upon discovering that there are few FCPA bright-line rules.

Thus, as highlighted below, an initial learning curve associated with the FCPA is gaining comfort with uncertainty.

For starters, the FCPA is a principle-based statute and not a rule-based statute and because of that learning about the FCPA (let alone conforming one’s conduct to the FCPA) is more difficult.

The analogy is as follows: as a driver it is easier to conform your conduct to a rule-based law (the speed limit is 65) or a principle-based law (the speed limit is to drive reasonable at all times).

Next, when studying and analyzing the FCPA one may have to confront the question of what does the FCPA mean? There should be a simple answer, but in many instances there is not.

Obviously, the FCPA means what legal authority (such as the statute, judicial decisions, and legislative history) say it means, but the problem here is that there is not much judicial authority of precedent construing the FCPA. Moreover, in much of the legal authority that does exist, judges have found various FCPA elements vague or ambiguous (see here for the prior post).

Thus, in learning what the FCPA means (or at least what the FCPA enforcement agencies say the FCPA means) one very soon encounters non-legal sources of information such as actual FCPA enforcement actions (i.e. prosecutorial common law – see here for the prior post), and DOJ/SEC FCPA Guidance including in the form of DOJ opinion procedure releases. The problem with this “stuff” of course is that it is not legal authority.

Combine the above dynamics and in many (but certainly not all) instances of FCPA scrutiny and enforcement one can ask two similar, yet distinct, questions. Indeed, the learning point here is to recognize how the questions are distinct.

The first is whether, given the DOJ’s and SEC’s enforcement theories, the conduct at issue can expose a company to FCPA scrutiny and an FCPA enforcement action? This question can often be answered yes.

The second question is whether Congress in passing the FCPA intended to capture the alleged conduct at issue and whether a court would find the alleged conduct in violation of the FCPA? This question is often unknown.

Obviously business organizations subject to the FCPA are most interested in the answer to the first question. However, at the risk of being called old-fashioned, the answer to the second question is important as well.

Once FCPA learners are over this hump, analysis of the statute begins.

Anything of value – well that is a fairly uncertain term and FCPA enforcement actions have included allegations about golfing, flowers, karaoke bars as well as payments as low as $4.

Foreign official – who the heck is a foreign official? The FCPA statute does not definitely answer this question, legislative history conflicts with current DOJ and SEC interpretations, and even the only judicial decision of precedent on this issue contains a non-exhaustive factor-based test (see here for the prior post).

Obtain or retain business – what does that mean? Well, it certainly means things of value offered or provided to secure foreign government contracts, but beyond that it depends. As highlighted in this article, the government has an overall losing record in cases outside the context of procurement and even in the U.S. v. Kay case which held that certain payments outside the context of foreign government could fall within the FCPA’s anti-bribery provisions the court pointed out that there “there are bound to be circumstances” in which such payments merely increase the profitability of an existing profitable company and thus, presumably does not assist the payer in obtaining or retaining business.  The court specifically stated as follows.

“If the government is correct that anytime operating costs are reduced the beneficiary of such advantage is assisted in getting or keeping business, the FCPA’s language that expresses the necessary element of assisting in obtaining or retaining business would be unnecessary, and thus surplusage – a conclusion that we are forbidden to reach.”

In short, uncertainly there as well.

Next, one encounters the FCPA’s exception for facilitation payments. If one has trouble understanding these provisions, don’t feel bad – federal court judges do as well (see here for the prior post).

Then one reads that the exception specifically mentions “obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country” but also learns that many FCPA enforcement actions concern payments in connection with “obtaining permits, licenses, or other official documents to qualify a person to do business in a foreign country.”

Just remember those two questions discussed above.

From there, it is on to the so-called “reasonable and bona fide” business expenditures affirmative defense and if there was ever an uncertain term in the FCPA “reasonable” would be it (a term which also appears frequently in the FCPA’s books and records and internal controls provisions).

And then it is on to the third-party payment provisions and learners think they “get it” that business organizations can be exposed to FCPA scrutiny and enforcement based on the conduct of various third parties. Yet, the FCPA (at least as written) is not a strict liability statute, but has a knowledge element embedded in it. However, the FCPA’s definition of knowledge is muddy.

Then one learns that to negate this knowledge element, business organizations often engage in compliance best practices. Yet, the term “best practices” is inherently uncertain. Do due diligence one might say, but what is due diligence and how much due diligence is enough? The FCPA does not answer this question.

And then of course it is on to the FCPA’s books and records and internal controls provisions – likely one of the most generic legal provisions one can find. Indeed, as stated by a federal court judge:

“The main problem with the internal accounting controls provision of the FCPA is that there are no specific standards by which to evaluate the sufficiency of controls; any evaluation is inevitably a highly subjective process in which knowledgable individuals can arrive at totally different conclusions.”

I could go on and on, but I trust you get the point.

When learning about the FCPA, one must first gain comfort with uncertainly. Often times the answers to questions are not legal answers, but risk tolerance answers which are often business judgments.

So when I leave students (whether spending an entire semester with them or just a few days) I often close by saying “well, at least you are now confused on a higher level.”

And that too is a component of learning.

]]> 38167 FCPA Repeat Offenders https://fcpaprofessor.com/fcpa-repeat-offenders-9/ Mon, 01 Jun 2026 19:52:18 +0000 https://fcpaprofessor.com/?p=38165 As highlighted below, there are 22 companies that have resolved a Foreign Corrupt Practices Act enforcement action – not just once – but twice – and in one instance – three times.


Note: this post uses the term repeat offender to mean a business organization that has resolved more than one FCPA enforcement action regardless of which agency (DOJ or SEC) brought the enforcement action; regardless of the form of resolution (plea agreement, NPA, DPA, administrative order, etc.) and regardless of whether the charges or findings were anti-bribery violations or books and records and internal controls violations in connection with foreign bribery issues. This post does not include instances in which a company resolved an enforcement action concerning foreign bribery and then resolved an action implicating the books and records and internal controls in a so-called non-FCPA FCPA enforcement action. (See here and here for examples). Nor does it include instances in which there was a time gap between a DOJ enforcement action and an SEC enforcement action based on the same core conduct (for instance Las Vegas Sands and Beam).



Three Time Offenders


ABB




Two Time Offenders


SAP




Philips




Oracle




Tenaris




Credit Suisse




Deutsche Bank




Novartis




Eni




Technip




Stryker




Halliburton




Biomet




Orthofix




Goodyear







Marubeni




Tyco




IBM




General Electric




Lucent / Alcatel-Lucent




Aibel Group / Vetco Gray




Baker Hughes




The number of FCPA repeat offenders calls into question whether the FCPA has been successful in achieving its objectives. (See here for the article). But then again, there are two ways to view corporate FCPA repeat offenders. (See here).


Of note, several instances of corporate FCPA repeat offenders involve companies whose first FCPA enforcement action (as well as second) was resolved via an NPA or DPA. For many years the DOJ has advanced the policy position that DPAs (and NPAs) “have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.” (See here for the prior post). Specifically in the FCPA context, the DOJ stated that “the companies against which DPAs and NPAs have been brought have often undergone dramatic changes.” (See here for the prior post).


 ]]> As highlighted below, there are 22 companies that have resolved a Foreign Corrupt Practices Act enforcement action – not just once – but twice – and in one instance – three times.

Note: this post uses the term repeat offender to mean a business organization that has resolved more than one FCPA enforcement action regardless of which agency (DOJ or SEC) brought the enforcement action; regardless of the form of resolution (plea agreement, NPA, DPA, administrative order, etc.) and regardless of whether the charges or findings were anti-bribery violations or books and records and internal controls violations in connection with foreign bribery issues. This post does not include instances in which a company resolved an enforcement action concerning foreign bribery and then resolved an action implicating the books and records and internal controls in a so-called non-FCPA FCPA enforcement action. (See here and here for examples). Nor does it include instances in which there was a time gap between a DOJ enforcement action and an SEC enforcement action based on the same core conduct (for instance Las Vegas Sands and Beam).

Three Time Offenders

ABB

Two Time Offenders

SAP

Philips

Oracle

Tenaris

Credit Suisse

Deutsche Bank

Novartis

Eni

Technip

Stryker

Halliburton

Biomet

Orthofix

Goodyear

Marubeni

Tyco

IBM

General Electric

Lucent / Alcatel-Lucent

Aibel Group / Vetco Gray

Baker Hughes

The number of FCPA repeat offenders calls into question whether the FCPA has been successful in achieving its objectives. (See here for the article). But then again, there are two ways to view corporate FCPA repeat offenders. (See here).

Of note, several instances of corporate FCPA repeat offenders involve companies whose first FCPA enforcement action (as well as second) was resolved via an NPA or DPA. For many years the DOJ has advanced the policy position that DPAs (and NPAs) “have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.” (See here for the prior post). Specifically in the FCPA context, the DOJ stated that “the companies against which DPAs and NPAs have been brought have often undergone dramatic changes.” (See here for the prior post).

 

]]> 38165 Years Later, FCPA Defendants Still Await Sentencing https://fcpaprofessor.com/years-later-fcpa-defendants-still-await-sentencing-2/ Thu, 28 May 2026 14:31:48 +0000 https://fcpaprofessor.com/?p=38163 this prior post, in October 2019, the DOJ announced that Cyrus Ahsani and Saman Ahsani (the former CEO and Chief Operations Officer of Monaco-based Unaoil) pleaded guilty in March 2019 to one count of conspiracy to violate the FCPA for their roles in a scheme to corruptly facilitate millions of dollars in bribe payments to officials in multiple countries.

The DOJ also announced that Steven Hunter (a former business development manager at Unaoil) pleaded guilty in August 2018 to one count of conspiracy to violate the FCPA.

As noted in the DOJ’s release, the Ahsanis were scheduled to be sentenced in April 2020 and Hunter was scheduled to be sentenced in March 2020.



However, this August 2022 post highlighted how the defendants still had yet to sentenced and wondered when sentencing would occur.

According to court dockets, sentencing of Cyrus Ahsani and Saman Ahsani was pushed back until October 2020, then February 2021, then September 2021, then December 2021, then June 2022, then December 2022, and then January 30, 2023. Each time sentencing was delayed, there were sealed filings on the court docket.

As highlighted in this prior post, Saman Ahsani was sentenced in January 2023 and the docket entry stated as follows:
“Minute Entry for proceedings held before Judge Andrew S Hanen: Sentencing held on 1/30/2023 for Saman Ahsani (1) as to Count 1 of the Indictment. The Court ruled on pending motions on the record. There being no objections to the PSR, the Court adopted the PSR and sentenced Defendant to the custody of the BOP for a term of 12 months and 1 day; 1 year SRT; no fine; $100 SA. The Court recommended that Defendant be permitted to return to his home country to serve his supervised release. The Court further recommended placement in the facility at Beaumont, Texas. The Defendant may self-surrender at a time and place to be determined by the BOP.”

When will Cyrus Ahsani and Hunter be sentenced?

According to court dockets, Cyrus Ahsani’s sentencing date was pushed back to August 21, 2023, then February 2024, then November 2024, then May 2025, then November 2025, then May 18, 2026, and is currently set for December 1, 2026.

Ahsani's most recent unopposed motion to continue sentencing (which the court granted in October 2025) stated:
As set forth in the prior motions, Mr. Ahsani has been cooperating with the Australian Federal Police (“AFP”) in their prosecution of David Savage and Russell Waugh in connection with Leighton Offshore Pte Ltd (the “Leighton Defendants”). Mr. Ahsani has already provided live testimony in those proceedings. The Australian prosecutors have now informed counsel that the trial of the Leighton Defendants is expected to be scheduled for the beginning of next year, at which time Mr. Ahsani will be called to testify again in person.

Continuing Mr. Ahsani’s sentencing and related deadlines will benefit both parties in this case, as well as the Australian government and the interests of justice. As stated in the prior motions, Mr. Ahsani wishes to continue fulfilling his commitment to the Australian government, and have his ongoing, truthful testimony considered by this Court at the time of sentencing. Testifying truthfully under oath in a foreign prosecution is a significant form of cooperation that should be fully weighed at sentencing.

This request is not made for purposes of delay, but to ensure that justice is done. Counsel for Mr. Ahsani has conferred with counsel for the United States, who has indicated that the United States is unopposed to this motion."

In the past six months, there have been five filings relevant to sentencing, but all filings are under seal.

According to court dockets, sentencing of Hunter was pushed back until October 2020, then January 2021, then May 2021, then September 2021, then December 2021, then July 2022, then December 2022, then February 2023, then September 2023, then March 2024, then December 2024, then December 2025, then June 1, 2026, and is currently scheduled for December 14, 2026.  Each time sentencing has been delayed, there are sealed filings on the court docket.

In short, Cyrus Ahsani pled guilty over 7 years ago and still has not been sentenced. Hunter pled guilty approximately 8 years ago and still has not been sentenced.

]]> As highlighted in this prior post, in October 2019, the DOJ announced that Cyrus Ahsani and Saman Ahsani (the former CEO and Chief Operations Officer of Monaco-based Unaoil) pleaded guilty in March 2019 to one count of conspiracy to violate the FCPA for their roles in a scheme to corruptly facilitate millions of dollars in bribe payments to officials in multiple countries.

The DOJ also announced that Steven Hunter (a former business development manager at Unaoil) pleaded guilty in August 2018 to one count of conspiracy to violate the FCPA.

As noted in the DOJ’s release, the Ahsanis were scheduled to be sentenced in April 2020 and Hunter was scheduled to be sentenced in March 2020.

However, this August 2022 post highlighted how the defendants still had yet to sentenced and wondered when sentencing would occur.

According to court dockets, sentencing of Cyrus Ahsani and Saman Ahsani was pushed back until October 2020, then February 2021, then September 2021, then December 2021, then June 2022, then December 2022, and then January 30, 2023. Each time sentencing was delayed, there were sealed filings on the court docket.

As highlighted in this prior post, Saman Ahsani was sentenced in January 2023 and the docket entry stated as follows:

“Minute Entry for proceedings held before Judge Andrew S Hanen: Sentencing held on 1/30/2023 for Saman Ahsani (1) as to Count 1 of the Indictment. The Court ruled on pending motions on the record. There being no objections to the PSR, the Court adopted the PSR and sentenced Defendant to the custody of the BOP for a term of 12 months and 1 day; 1 year SRT; no fine; $100 SA. The Court recommended that Defendant be permitted to return to his home country to serve his supervised release. The Court further recommended placement in the facility at Beaumont, Texas. The Defendant may self-surrender at a time and place to be determined by the BOP.”

When will Cyrus Ahsani and Hunter be sentenced?

According to court dockets, Cyrus Ahsani’s sentencing date was pushed back to August 21, 2023, then February 2024, then November 2024, then May 2025, then November 2025, then May 18, 2026, and is currently set for December 1, 2026.

Ahsani’s most recent unopposed motion to continue sentencing (which the court granted in October 2025) stated:

As set forth in the prior motions, Mr. Ahsani has been cooperating with the Australian Federal Police (“AFP”) in their prosecution of David Savage and Russell Waugh in connection with Leighton Offshore Pte Ltd (the “Leighton Defendants”). Mr. Ahsani has already provided live testimony in those proceedings. The Australian prosecutors have now informed counsel that the trial of the Leighton Defendants is expected to be scheduled for the beginning of next year, at which time Mr. Ahsani will be called to testify again in person.

Continuing Mr. Ahsani’s sentencing and related deadlines will benefit both parties in this case, as well as the Australian government and the interests of justice. As stated in the prior motions, Mr. Ahsani wishes to continue fulfilling his commitment to the Australian government, and have his ongoing, truthful testimony considered by this Court at the time of sentencing. Testifying truthfully under oath in a foreign prosecution is a significant form of cooperation that should be fully weighed at sentencing.

This request is not made for purposes of delay, but to ensure that justice is done. Counsel for Mr. Ahsani has conferred with counsel for the United States, who has indicated that the United States is unopposed to this motion.”

In the past six months, there have been five filings relevant to sentencing, but all filings are under seal.

According to court dockets, sentencing of Hunter was pushed back until October 2020, then January 2021, then May 2021, then September 2021, then December 2021, then July 2022, then December 2022, then February 2023, then September 2023, then March 2024, then December 2024, then December 2025, then June 1, 2026, and is currently scheduled for December 14, 2026.  Each time sentencing has been delayed, there are sealed filings on the court docket.

In short, Cyrus Ahsani pled guilty over 7 years ago and still has not been sentenced. Hunter pled guilty approximately 8 years ago and still has not been sentenced.

]]> 38163 Checking In On Kodiak Gas Services https://fcpaprofessor.com/checking-in-on-kodiak-gas-services/ Wed, 27 May 2026 13:30:16 +0000 https://fcpaprofessor.com/?p=38157
In late 2023, Kodiak announced its intent to acquire CSI Compressco LP whose customers included various business in several foreign countries including Mexico, Canada, Argentina, and Chile.

This previous post highlighted a 2025 disclosure by Kodiak regarding compliance issues in Mexico.

Kodiak's most recent quarterly filing (May 11th) states:

"In the first quarter of 2025, the Company received a report regarding certain payments to local government officials in Mexico that commenced prior to the Company’s acquisition of its Mexican business in connection with the acquisition of CSI Compressco LP (the “CSI Acquisition”) that presented potential compliance issues under U.S. law."



The disclosure continues:
"In response, the Company retained outside counsel to conduct an internal investigation of the reported payments, including whether any payments made may have indirectly benefited individuals associated with certain criminal cartel organizations, some of which may be designated as foreign terrorist organizations (FTOs) and Specially Designated Global Terrorists (SDGTs) per Executive Order 14157 of January 20, 2025. The investigation determined that certain payments likely were made to persons associated with an organization designated as an FTO or SDGT. The payments appear to have been made in order to protect employees of the Mexican business from threats of harm or harassment, and to ensure access to work sites. The aggregate amount of these payments was not material. The Company sold its operations and legal entities in Mexico on September 30, 2025.
The Company voluntarily self-reported this matter to governmental authorities in the United States, including the Department of Justice (“DOJ”) and the Office of Foreign Assets Control (“OFAC”), and is cooperating with the investigative steps being taken by the DOJ and OFAC into the matter as a result of the voluntary self-disclosure. The Company also voluntarily self-reported to the SEC and intends to cooperate fully should there be any investigation by the Commission. This matter could result in U.S. governmental authorities seeking criminal and/or civil sanctions, including monetary fines and penalties, against the Company, as well as requiring additional changes to the Company’s business practices and compliance programs. To the extent any of the payments at issue are determined to be illegal in a foreign jurisdiction, it is possible that there could be civil or criminal penalties assessed in that jurisdiction.



Although the Company does not expect the findings from the investigation or actions taken by governmental authorities to have a significant adverse impact on its business, results of operations, financial condition and cash flows, there can be no assurance as to the ultimate outcome of these matters at this time."


]]> Kodiak Gas Services is a provider of natural gas contract compression services.

In late 2023, Kodiak announced its intent to acquire CSI Compressco LP whose customers included various business in several foreign countries including Mexico, Canada, Argentina, and Chile.

This previous post highlighted a 2025 disclosure by Kodiak regarding compliance issues in Mexico.

Kodiak’s most recent quarterly filing (May 11th) states:

“In the first quarter of 2025, the Company received a report regarding certain payments to local government officials in Mexico that commenced prior to the Company’s acquisition of its Mexican business in connection with the acquisition of CSI Compressco LP (the “CSI Acquisition”) that presented potential compliance issues under U.S. law.”

The disclosure continues:

“In response, the Company retained outside counsel to conduct an internal investigation of the reported payments, including whether any payments made may have indirectly benefited individuals associated with certain criminal cartel organizations, some of which may be designated as foreign terrorist organizations (FTOs) and Specially Designated Global Terrorists (SDGTs) per Executive Order 14157 of January 20, 2025. The investigation determined that certain payments likely were made to persons associated with an organization designated as an FTO or SDGT. The payments appear to have been made in order to protect employees of the Mexican business from threats of harm or harassment, and to ensure access to work sites. The aggregate amount of these payments was not material. The Company sold its operations and legal entities in Mexico on September 30, 2025.

The Company voluntarily self-reported this matter to governmental authorities in the United States, including the Department of Justice (“DOJ”) and the Office of Foreign Assets Control (“OFAC”), and is cooperating with the investigative steps being taken by the DOJ and OFAC into the matter as a result of the voluntary self-disclosure. The Company also voluntarily self-reported to the SEC and intends to cooperate fully should there be any investigation by the Commission. This matter could result in U.S. governmental authorities seeking criminal and/or civil sanctions, including monetary fines and penalties, against the Company, as well as requiring additional changes to the Company’s business practices and compliance programs. To the extent any of the payments at issue are determined to be illegal in a foreign jurisdiction, it is possible that there could be civil or criminal penalties assessed in that jurisdiction.
Although the Company does not expect the findings from the investigation or actions taken by governmental authorities to have a significant adverse impact on its business, results of operations, financial condition and cash flows, there can be no assurance as to the ultimate outcome of these matters at this time.”
]]> 38157 An Interesting Take https://fcpaprofessor.com/an-interesting-take/ Tue, 26 May 2026 13:07:40 +0000 https://fcpaprofessor.com/?p=38154
Which makes this recent Morrison & Foerster alert which addressed the recent dismissal in U.S. v. Rovirosa a bit unusual.

First, some background.

In December 2025, Ramon Alexandro Rovirosa Martinez was found guilty after a bizarre trial of various charges in connection with an alleged Mexican bribery scheme. (See here for the prior post).

As reported here, the trial featured no fact witnesses which led the judge to block the government from introducing most of its evidence until their closing argument.



Post-trial, Rovirosa filed a motion for a judgement of acquittal and among the reasons stated were the following:

(i) “the Government presented evidence to the jury that was either not properly admitted into evidence and/or that should not have been admitted into evidence;”

(ii) “the jury was provided with text messages to and from alleged co-conspirators that were never properly admitted into evidence, and the Government never offered evidence to satisfy any legal exception to the hearsay rule;” and

(iii) “the jury was provided with testimonial translations of text messages with no testimony by the translator, despite defense counsel’s request and objection, in violation of the Confrontation Clause.”

With that motion pending Rovirosa also filed a “Motion to Dismiss Case with Prejudice Based on the Court’s Supervisory Powers.” Among the reasons stated were the following: “the Government attorneys in this case (1) made misrepresentations to the Court and/or to the jury that willfully mispresented both the record and the legal standards; (2) failed to provide evidence to defense counsel, and (3) failed to present any witnesses at trial with actual knowledge of the facts. Even more alarming, the case was under the legal supervision of a Department of Justice supervisory attorney, who apparently allowed such conduct to occur.”

U.S. District Court Judge Kenneth Hoyt (S.D. Texas) granted the motion to dismiss and motion for acquittal. He concluded:
“After considering the relevant circumstances surrounding the government’s case, and its intended use of electronic messages between the alleged co-conspirators and the co-defendant, the Court determines that the messages are testimonial and are governed by common law and the Confrontation Clause of the Sixth Amendment. The Court finds that the messages of the coconspirators and, in particular, the co-defendant Avila, while they constitute hearsay messages, and would be admissible in a conspiracy setting, they are not automatically admissible here because, as translations, and when used to establish the case, they are testimonial. The government’s primary purpose for offering the messages was to convict Rovirosa, i.e. to prove the elements of the crimes charged in the Indictment. See Crawford, 541 U.S. at 51.

In reaching this conclusion, the Court finds that the government has not produced evidence showing that the Translators were unavailable or that Rovirosa was given an opportunity to cross-examine them prior to trial. The precedent is clear, the government had a duty to produce the Translators for cross examination.

The government turns next to the certification sequence for admissibility. It argues that Google or Yahoo and WhatsApp recorded the transmittals between Rovirosa, and between the alleged co-conspirators that were made on their own electronic devices capturing them in the regular course of their business activities. Hence, the government argues the messages are admissible under the business [records] exceptions rules. See Fed. R. Evid. 803(6). The government also argues that the Translators certified their translations under oath; and that Special Agent Varga reviewed the Translators’ translations and certified the accuracy of their translations. The Court will address these arguments, however, they are all unavailing.

Fed. R. Evid. 801(c) and (d) and 803(6), address hearsay exceptions that apply to business records or electronic messages when they are offered into evidence. Rovirosa does not argue that the translations were not properly certified by Google or others, or that the business records exception, generally, satisfies the hearsay rule exception such that out-of-court hearsay statements or documents may be admitted. Instead, he argues that, even if the federal rules of procedure or evidence are satisfied, the electronic messages must be excluded because: (a) the messages offered were translations from Spanish to English, between and among alleged co-conspirators and, as such, the Confrontations Clause prohibits admission if they are testimonial statements by a non-testifying witness. The precedent exceptions to this rule do not apply here because Rovirosa had no prior opportunity to cross-examine the witnesses.

The record shows that the government intentionally did not call as witnesses the Translators. Hence, Rovirosa was not provided an opportunity to cross-examine them prior to or during trial. Moreover, there is no evidence that the government could not have produced them. Nor is there evidence that the government made an effort to produce them. Hence, the Court concludes that Rovirosa’s right to cross-examine the Translators and the co-defendant, cannot be truncated by offering certifications, particularly since the Translators were available to the government. Moreover, Rovirosa’s right to cross-examine the Translators is not satisfied by the government’s tender of Special Agent Varga to testify that she re-examined the Translator’s translations and is of the opinion that they are accurate. To permit this type of “expert” evidence, turns on its head the science and art of proper translation considerations.

It is well accepted that Translators fall into one of two camps, those who use the pedagogic/literal format – word for word, or exercise poetic/dynamic, where the Translator seeks the pulse and tone of expressions in order to capture words and expressions. Cross-examination permits recognition of cultural sensitivity issues, specialized knowledge, and the level at which the Translator’s education and usage of the language may rest. To that add regional nuances and contextual consideration as the occasion dictates. To ignore the art and science of the translation process is to render cross-examination of the Translators, useless or questionable.

The jury recognized that the English translations short-circuited its review of the evidence, an evidentiary fact missed by the Court. During deliberations, the jury requested that the Court provide the Spanish messages during deliberations. The Court could not provide the Spanish messages because they had not been offered into evidence by the government. This failing by the government becomes more poignant when considered in the light of Rovirosa’s complaint that the government failed to produce forensic copies of the Spanish messages taken from both defendants’ electronic devices.

The government promised to produce the screen shots on at least two occasions. On September 26 and October 1, 2025, Department of Justice Attorney, Bennett Starnes, promised the materials. The materials were never produced, and this failing is also fatal to the government’s case.”

In conclusion, Judge Hoyt stated:
“Based on the Court’s findings and conclusions, the Court GRANTS the defendant Rovirosa’s motion to dismiss the Indictment pursuant to Fed. R. Crim. Pro. 29(c); alternatively, to ACQUIT him of all charges based on lack of evidence to support his conviction in violation of the Confrontation Clause of the Sixth Amendment. He is ORDERED released, forthwith.”

Among the authors of the Morrison & Foerster alert is former DOJ FCPA attorneys Charles Duross and James Koukios. In pertinent part, the alert states:
"This ruling appears open to challenge on appeal. First, the emails themselves should be non-hearsay under Federal Rule of Evidence 801(d)(2) because they were offered against the defendant and were either statements of the defendant or statements of the defendant’s co-conspirators made during and in furtherance of the conspiracy. Second, the usual procedure for disputed translations is to allow both sides to submit their own translations to the jury. Third, to the extent that it believed that testimony from the government’s translators was nevertheless necessary, the court could have either required such testimony during the trial or ordered a new trial during which such testimony could be elicited; an acquittal may be viewed as an overly severe outcome under the circumstances. Even if not reversed, the order relates simply to an evidentiary issue and does not implicate any substantive FCPA issues. (The same judge was reversed in February 2023 for dismissing FCPA charges in another case)"

]]> Law firm client alerts on Foreign Corrupt Practices Act topics are usually rather basic – the so-called “who, what, where” regarding the development.

Which makes this recent Morrison & Foerster alert which addressed the recent dismissal in U.S. v. Rovirosa a bit unusual.

First, some background.

In December 2025, Ramon Alexandro Rovirosa Martinez was found guilty after a bizarre trial of various charges in connection with an alleged Mexican bribery scheme. (See here for the prior post).

As reported here, the trial featured no fact witnesses which led the judge to block the government from introducing most of its evidence until their closing argument.

Post-trial, Rovirosa filed a motion for a judgement of acquittal and among the reasons stated were the following:

(i) “the Government presented evidence to the jury that was either not properly admitted into evidence and/or that should not have been admitted into evidence;”

(ii) “the jury was provided with text messages to and from alleged co-conspirators that were never properly admitted into evidence, and the Government never offered evidence to satisfy any legal exception to the hearsay rule;” and

(iii) “the jury was provided with testimonial translations of text messages with no testimony by the translator, despite defense counsel’s request and objection, in violation of the Confrontation Clause.”

With that motion pending Rovirosa also filed a “Motion to Dismiss Case with Prejudice Based on the Court’s Supervisory Powers.” Among the reasons stated were the following: “the Government attorneys in this case (1) made misrepresentations to the Court and/or to the jury that willfully mispresented both the record and the legal standards; (2) failed to provide evidence to defense counsel, and (3) failed to present any witnesses at trial with actual knowledge of the facts. Even more alarming, the case was under the legal supervision of a Department of Justice supervisory attorney, who apparently allowed such conduct to occur.”

U.S. District Court Judge Kenneth Hoyt (S.D. Texas) granted the motion to dismiss and motion for acquittal. He concluded:

“After considering the relevant circumstances surrounding the government’s case, and its intended use of electronic messages between the alleged co-conspirators and the co-defendant, the Court determines that the messages are testimonial and are governed by common law and the Confrontation Clause of the Sixth Amendment. The Court finds that the messages of the coconspirators and, in particular, the co-defendant Avila, while they constitute hearsay messages, and would be admissible in a conspiracy setting, they are not automatically admissible here because, as translations, and when used to establish the case, they are testimonial. The government’s primary purpose for offering the messages was to convict Rovirosa, i.e. to prove the elements of the crimes charged in the Indictment. See Crawford, 541 U.S. at 51.

In reaching this conclusion, the Court finds that the government has not produced evidence showing that the Translators were unavailable or that Rovirosa was given an opportunity to cross-examine them prior to trial. The precedent is clear, the government had a duty to produce the Translators for cross examination.

The government turns next to the certification sequence for admissibility. It argues that Google or Yahoo and WhatsApp recorded the transmittals between Rovirosa, and between the alleged co-conspirators that were made on their own electronic devices capturing them in the regular course of their business activities. Hence, the government argues the messages are admissible under the business [records] exceptions rules. See Fed. R. Evid. 803(6). The government also argues that the Translators certified their translations under oath; and that Special Agent Varga reviewed the Translators’ translations and certified the accuracy of their translations. The Court will address these arguments, however, they are all unavailing.

Fed. R. Evid. 801(c) and (d) and 803(6), address hearsay exceptions that apply to business records or electronic messages when they are offered into evidence. Rovirosa does not argue that the translations were not properly certified by Google or others, or that the business records exception, generally, satisfies the hearsay rule exception such that out-of-court hearsay statements or documents may be admitted. Instead, he argues that, even if the federal rules of procedure or evidence are satisfied, the electronic messages must be excluded because: (a) the messages offered were translations from Spanish to English, between and among alleged co-conspirators and, as such, the Confrontations Clause prohibits admission if they are testimonial statements by a non-testifying witness. The precedent exceptions to this rule do not apply here because Rovirosa had no prior opportunity to cross-examine the witnesses.

The record shows that the government intentionally did not call as witnesses the Translators. Hence, Rovirosa was not provided an opportunity to cross-examine them prior to or during trial. Moreover, there is no evidence that the government could not have produced them. Nor is there evidence that the government made an effort to produce them. Hence, the Court concludes that Rovirosa’s right to cross-examine the Translators and the co-defendant, cannot be truncated by offering certifications, particularly since the Translators were available to the government. Moreover, Rovirosa’s right to cross-examine the Translators is not satisfied by the government’s tender of Special Agent Varga to testify that she re-examined the Translator’s translations and is of the opinion that they are accurate. To permit this type of “expert” evidence, turns on its head the science and art of proper translation considerations.

It is well accepted that Translators fall into one of two camps, those who use the pedagogic/literal format – word for word, or exercise poetic/dynamic, where the Translator seeks the pulse and tone of expressions in order to capture words and expressions. Cross-examination permits recognition of cultural sensitivity issues, specialized knowledge, and the level at which the Translator’s education and usage of the language may rest. To that add regional nuances and contextual consideration as the occasion dictates. To ignore the art and science of the translation process is to render cross-examination of the Translators, useless or questionable.

The jury recognized that the English translations short-circuited its review of the evidence, an evidentiary fact missed by the Court. During deliberations, the jury requested that the Court provide the Spanish messages during deliberations. The Court could not provide the Spanish messages because they had not been offered into evidence by the government. This failing by the government becomes more poignant when considered in the light of Rovirosa’s complaint that the government failed to produce forensic copies of the Spanish messages taken from both defendants’ electronic devices.

The government promised to produce the screen shots on at least two occasions. On September 26 and October 1, 2025, Department of Justice Attorney, Bennett Starnes, promised the materials. The materials were never produced, and this failing is also fatal to the government’s case.”

In conclusion, Judge Hoyt stated:

“Based on the Court’s findings and conclusions, the Court GRANTS the defendant Rovirosa’s motion to dismiss the Indictment pursuant to Fed. R. Crim. Pro. 29(c); alternatively, to ACQUIT him of all charges based on lack of evidence to support his conviction in violation of the Confrontation Clause of the Sixth Amendment. He is ORDERED released, forthwith.”

Among the authors of the Morrison & Foerster alert is former DOJ FCPA attorneys Charles Duross and James Koukios. In pertinent part, the alert states:

“This ruling appears open to challenge on appeal. First, the emails themselves should be non-hearsay under Federal Rule of Evidence 801(d)(2) because they were offered against the defendant and were either statements of the defendant or statements of the defendant’s co-conspirators made during and in furtherance of the conspiracy. Second, the usual procedure for disputed translations is to allow both sides to submit their own translations to the jury. Third, to the extent that it believed that testimony from the government’s translators was nevertheless necessary, the court could have either required such testimony during the trial or ordered a new trial during which such testimony could be elicited; an acquittal may be viewed as an overly severe outcome under the circumstances. Even if not reversed, the order relates simply to an evidentiary issue and does not implicate any substantive FCPA issues. (The same judge was reversed in February 2023 for dismissing FCPA charges in another case)”

]]> 38154 FCPA Scrutiny Of Methode Electronics Ends https://fcpaprofessor.com/fcpa-scrutiny-of-methode-electronics-ends/ Wed, 20 May 2026 11:42:13 +0000 https://fcpaprofessor.com/?p=38148 Methode Electronics, Inc., a publicly traded company based in Chicago, is “a leading global supplier of custom-engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East, and Asia.”

The Company’s solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment and consumer appliance.

As highlighted in this prior post, in late 2024 Methode disclosed FCPA scrutiny.

The company stated:


“The Company received a subpoena from the SEC dated November 1, 2024 seeking documents and information relating to, among other things, the Company’s operations in certain foreign countries, certain financial and accounting matters relating thereto, compliance with the Foreign Corrupt Practices Act and other anti-corruption laws, and material weaknesses in the Company’s internal control over financial reporting previously reported in its public filings. The Company is cooperating with the SEC. The subpoena and related investigation or other future requests for information could result in costs to the Company, including the expenditure of financial and managerial resources. In addition, this request may lead to the assertion of claims or the commencement of legal proceedings against the Company, which in turn may lead to material fines, penalties or other liabilities. However, at this time, the Company is unable to reasonably estimate an amount or range of reasonably possible loss, if any, that may result from these matters.”

Methode's most recent quarterly filing (March 2026) likewise stated:
"The Company received subpoenas from the SEC dated November 1, 2024 and March 12, 2025 seeking documents and information relating to, among other things, the Company’s operations in certain foreign countries, certain financial and accounting matters relating thereto, compliance with the Foreign Corrupt Practices Act and other anti-corruption laws, material weaknesses in the Company’s internal control over financial reporting previously reported in its public filings, deficiencies and significant deficiencies in the Company’s internal control over financial reporting, accounting and finance policies and procedures and other accounting and finance matters including new business bookings, certain financial metrics and performance indicators, performance relative to targets and guidance for certain periods, executive compensation policies and amounts, hotline tips and complaints, and terminations or resignations of company executives. The Company is cooperating with the SEC. The subpoenas and related investigation or other future requests for information have resulted and could result in future costs to the Company, including the expenditure of financial and managerial resources. In addition, this request may lead to the assertion of claims or the commencement of legal proceedings against the Company, which in turn may lead to material fines, penalties or other liabilities. However, at this time, the Company is unable to reasonably estimate an amount or range of reasonably possible loss, if any, that may result from these matters."

In a recent filing, the company stated:
"As previously disclosed, the Company was subject to an investigation by the Securities and Exchange Commission. On May 14, 2026, the SEC Staff notified the Company that it has concluded its investigation and does not intend to recommend an enforcement action."

]]> Methode Electronics, Inc., a publicly traded company based in Chicago, is “a leading global supplier of custom-engineered solutions with sales, engineering and manufacturing locations in North America, Europe, Middle East, and Asia.”

The Company’s solutions are found in the end markets of transportation (including automotive, commercial vehicle, e-bike, aerospace, bus and rail), cloud computing infrastructure, construction equipment and consumer appliance.

As highlighted in this prior post, in late 2024 Methode disclosed FCPA scrutiny.

The company stated:

“The Company received a subpoena from the SEC dated November 1, 2024 seeking documents and information relating to, among other things, the Company’s operations in certain foreign countries, certain financial and accounting matters relating thereto, compliance with the Foreign Corrupt Practices Act and other anti-corruption laws, and material weaknesses in the Company’s internal control over financial reporting previously reported in its public filings. The Company is cooperating with the SEC. The subpoena and related investigation or other future requests for information could result in costs to the Company, including the expenditure of financial and managerial resources. In addition, this request may lead to the assertion of claims or the commencement of legal proceedings against the Company, which in turn may lead to material fines, penalties or other liabilities. However, at this time, the Company is unable to reasonably estimate an amount or range of reasonably possible loss, if any, that may result from these matters.”

Methode’s most recent quarterly filing (March 2026) likewise stated:

“The Company received subpoenas from the SEC dated November 1, 2024 and March 12, 2025 seeking documents and information relating to, among other things, the Company’s operations in certain foreign countries, certain financial and accounting matters relating thereto, compliance with the Foreign Corrupt Practices Act and other anti-corruption laws, material weaknesses in the Company’s internal control over financial reporting previously reported in its public filings, deficiencies and significant deficiencies in the Company’s internal control over financial reporting, accounting and finance policies and procedures and other accounting and finance matters including new business bookings, certain financial metrics and performance indicators, performance relative to targets and guidance for certain periods, executive compensation policies and amounts, hotline tips and complaints, and terminations or resignations of company executives. The Company is cooperating with the SEC. The subpoenas and related investigation or other future requests for information have resulted and could result in future costs to the Company, including the expenditure of financial and managerial resources. In addition, this request may lead to the assertion of claims or the commencement of legal proceedings against the Company, which in turn may lead to material fines, penalties or other liabilities. However, at this time, the Company is unable to reasonably estimate an amount or range of reasonably possible loss, if any, that may result from these matters.”

In a recent filing, the company stated:

“As previously disclosed, the Company was subject to an investigation by the Securities and Exchange Commission. On May 14, 2026, the SEC Staff notified the Company that it has concluded its investigation and does not intend to recommend an enforcement action.”

]]> 38148 SEC Rescinds Long-Standing Settlement Policy https://fcpaprofessor.com/sec-rescinds-long-standing-settlement-policy/ Tue, 19 May 2026 13:02:11 +0000 https://fcpaprofessor.com/?p=38146 posts on this site for approximately 15 years.

Yesterday, the SEC rescinded the policy.

The SEC release states:

"The Securities and Exchange Commission today rescinded a policy, codified in Rule 202.5(e) of its informal rules of procedures, stating that when it chooses to settle an enforcement action in which a sanction is imposed, it will not settle unless the defendant or respondent also agrees not to publicly deny the allegations in the complaint or administrative order. Rescinding Rule 202.5(e) aligns the Commission with the overwhelming majority of federal agencies that do not have a similar rule and gives the Commission more flexibility in settling enforcement actions, which conserves resources, provides certainty, and potentially expedites the return of money to injured investors. The recission recognizes that the effect on the public interest from such denials may be minimal and that the policy itself may have created an incorrect impression that the Commission is trying to shield itself from criticism."



The release further states:
“For more than 50 years, the Commission has conditioned settlement on a defendant’s promise not to publicly deny the Commission’s allegations. I am pleased that we are rescinding the no-deny policy today,” said SEC Chairman Paul S. Atkins. “Speech critical of the government is an important part of the American tradition. This recission ends the policy prohibiting such criticism by settling defendants.”

There is no known instance of the Commission seeking to reopen an administrative or civil proceeding as a consequence of a defendant or respondent violating a no-deny provision to which they have consented.

In light of the recission of Rule 202.5(e), the Commission will not enforce existing no-deny provisions that have already been entered. In the event of a breach of an existing no-deny provision, the Commission will take no action to ask a district court to vacate a settlement (or to reopen an adjudicatory proceeding) in connection with the terms of the settlement agreement.

The Commission generally does not require settling defendants to admit to allegations. Today’s recission does not affect the Commission’s practice related to admissions in settlements and does not affect the Commission’s discretion to settle with defendants who decline to admit facts or liability or its discretion to negotiate for admissions as part of a settlement."

SEC Commissioner Hester Peirce, long a critic of the settlement policy, released the following statement.
"[T]he Commission rescinded its decades-old no-admit/no-deny policy governing the settlement process. Under this policy, settling defendants cannot publicly deny the allegations in a complaint or permit anyone else to do so.  The Commission will no longer require and demand that defendants in its enforcement actions curtail their right to speak as a condition of settlement.  For reasons I have explained before, this result is good and brings the Commission into alignment with nearly every other part of the federal government. Settlements shrouded in forced silence by the non-governmental party do not serve either the markets or the Commission’s investor-protection mission.  To the contrary, people’s freedom to speak against the government contributes to its ability to govern well. Transparent enforcement of the securities laws helps create the environment in which free markets thrive, and enabling both parties in an enforcement action to speak freely contributes to transparency.

Ending this imprudent policy, of course, does not mean that the Commission will stop resolving cases through settlement.  The excellent investigative work of our professional, dedicated staff stands on its own ground, notwithstanding a defendant’s protestations of innocence.  The public now will be able to assess the Commission’s case in light of a defendant’s denials.  The result, I expect, will be what free speech often produces: somewhere between cacophony and euphony—neither terribly pleasing to the ear, not entirely unpleasant to hear.  That the noise happens at all, however, is a substantial step forward for both the Commission and the right of a free people to speak their mind."



 ]]> The SEC’s long-standing “neither admit nor deny” settlement policy has been the focus of posts on this site for approximately 15 years.

Yesterday, the SEC rescinded the policy.

The SEC release states:

“The Securities and Exchange Commission today rescinded a policy, codified in Rule 202.5(e) of its informal rules of procedures, stating that when it chooses to settle an enforcement action in which a sanction is imposed, it will not settle unless the defendant or respondent also agrees not to publicly deny the allegations in the complaint or administrative order. Rescinding Rule 202.5(e) aligns the Commission with the overwhelming majority of federal agencies that do not have a similar rule and gives the Commission more flexibility in settling enforcement actions, which conserves resources, provides certainty, and potentially expedites the return of money to injured investors. The recission recognizes that the effect on the public interest from such denials may be minimal and that the policy itself may have created an incorrect impression that the Commission is trying to shield itself from criticism.”

The release further states:

“For more than 50 years, the Commission has conditioned settlement on a defendant’s promise not to publicly deny the Commission’s allegations. I am pleased that we are rescinding the no-deny policy today,” said SEC Chairman Paul S. Atkins. “Speech critical of the government is an important part of the American tradition. This recission ends the policy prohibiting such criticism by settling defendants.”

There is no known instance of the Commission seeking to reopen an administrative or civil proceeding as a consequence of a defendant or respondent violating a no-deny provision to which they have consented.

In light of the recission of Rule 202.5(e), the Commission will not enforce existing no-deny provisions that have already been entered. In the event of a breach of an existing no-deny provision, the Commission will take no action to ask a district court to vacate a settlement (or to reopen an adjudicatory proceeding) in connection with the terms of the settlement agreement.

The Commission generally does not require settling defendants to admit to allegations. Today’s recission does not affect the Commission’s practice related to admissions in settlements and does not affect the Commission’s discretion to settle with defendants who decline to admit facts or liability or its discretion to negotiate for admissions as part of a settlement.”

SEC Commissioner Hester Peirce, long a critic of the settlement policy, released the following statement.

“[T]he Commission rescinded its decades-old no-admit/no-deny policy governing the settlement process. Under this policy, settling defendants cannot publicly deny the allegations in a complaint or permit anyone else to do so.  The Commission will no longer require and demand that defendants in its enforcement actions curtail their right to speak as a condition of settlement.  For reasons I have explained before, this result is good and brings the Commission into alignment with nearly every other part of the federal government. Settlements shrouded in forced silence by the non-governmental party do not serve either the markets or the Commission’s investor-protection mission.  To the contrary, people’s freedom to speak against the government contributes to its ability to govern well. Transparent enforcement of the securities laws helps create the environment in which free markets thrive, and enabling both parties in an enforcement action to speak freely contributes to transparency.

Ending this imprudent policy, of course, does not mean that the Commission will stop resolving cases through settlement.  The excellent investigative work of our professional, dedicated staff stands on its own ground, notwithstanding a defendant’s protestations of innocence.  The public now will be able to assess the Commission’s case in light of a defendant’s denials.  The result, I expect, will be what free speech often produces: somewhere between cacophony and euphony—neither terribly pleasing to the ear, not entirely unpleasant to hear.  That the noise happens at all, however, is a substantial step forward for both the Commission and the right of a free people to speak their mind.”

 

]]> 38146 Checking In On the Adani Enforcement Actions https://fcpaprofessor.com/checking-in-on-the-adani-enforcement-actions/ Mon, 18 May 2026 13:18:40 +0000 https://fcpaprofessor.com/?p=38142
Both the SEC and DOJ enforcement actions included a Foreign Corrupt Practices Act component (see here and here), but not as to Gautam Adani (a citizen of India and founder of the Adani Group which includes numerous portfolio companies including Adani Green Energy – and Indian energy company) and Sagar Adani (a citizen of India and Gautam Adani’s nephew and Executive Director of Adani Green’s Board of Directors) perhaps due to jurisdiction issues.

Nevertheless, Gautam Adani and Sagar Adani were civilly charged with securities fraud in connection with the same core conduct.



As alleged in the SEC civil complaint:
"In 2021, two senior executives of Adani Green Energy Ltd. (“Adani Green”)— Gautam Adani, Adani Green’s founder and controlling shareholder, and Sagar Adani, Adani Green’s Executive Director (collectively, “Defendants”)—engaged in a bribery scheme involving the equivalent of hundreds of millions of dollars to obtain contracts that benefitted Adani Green, while, at the same time, falsely touting the company’s compliance with antibribery principles and laws in connection with a $750 million bond offering (the “Offering”).

Gautam Adani founded Adani Green and Defendants are part of a four-person management team that controls it. For years, Defendants positioned Adani Green to investors and the public as a leader among its peers and within India in principles of good corporate governance, highlighting Adani Green’s purportedly rigorous anti-bribery and anti-corruption principles and policies, and seeking to appeal to investors who valued governance factors.

In September 2021, Defendants leveraged that narrative in the Offering to sell $750 million of Adani Green corporate bonds (“Notes”), including more than $175 million in Notes to investors in the United States.

In connection with the Offering, Adani Green told purchasers of the Notes that none of Adani Green’s directors or officers, including Defendants themselves, had paid or promised to pay bribes to government officials or attempted to unduly influence those officials. Adani Green and Defendants also emphasized to underwriters and potential investors that Adani Green had implemented robust anti-bribery and anti-corruption processes and that Adani Green was a leader in India in good corporate governance.

None of this was true. In the months and weeks before making these representations in connection with the Offering, Defendants were personally involved in paying or promising the equivalent of hundreds of millions of dollars in bribes to Indian state government officials to induce Indian state governments to enter into contracts necessary for Adani Green to develop India’s largest solar power plant project, from which Adani Green stood to earn billions of dollars.

A second company involved in that power plant project, Azure Global Power Limited (“Azure”), agreed to pay a portion of those bribes and Defendants were also personally involved in collecting payment from Azure.

Gautam Adani and Sagar Adani lied to purchasers of Adani Green’s Notes about Adani Green’s and their own involvement in a complex and high value bribery scheme. Those lies, made in connection with the offer and sale of Notes to investors in the United States, violated the antifraud provisions of the federal securities laws.”

Last week, the SEC announced:
"Without admitting or denying the allegations in the complaint, Gautam Adani and Sagar Adani each consented to the entry of final judgments, subject to court approval, that would permanently enjoin each from violating [various securities law provisions]. In addition, the final judgments, if approved by the court, would order Gautam Adani and Sagar Adani to pay civil monetary penalties of $6,000,000 and $12,000,000, respectively."

In connection with the same core conduct Gautam Adani and Sagar Adani were also criminally charged with securities fraud conspiracy and wire fraud conspiracy.

Today, the DOJ filed a consent motion to dismiss the case, not just against the Adanis but other defendants as well.

The motion states;
"The government respectfully submits this motion, pursuant to Federal Rule of Criminal Procedure 48(a), requesting that the Court dismiss the indictment in this case with prejudice. The Department of Justice has reviewed this case and has decided, in its prosecutorial discretion, not to devote further resources to these criminal charges against individual defendants. See United States v. Blaszczak, 56 F.4th 230, 238-42 (2d Cir. 2022) (“The government may elect to eschew or discontinue prosecutions for any of a number of reasons. Rarely will the judiciary overrule the Executive Branch’s exercise of these prosecutorial decisions.”). No defendant has appeared. Counsel for all defendants consent to this relief."

]]> In late 2024, the SEC and DOJ brought enforcement actions against various individuals associated with Adani Group and Azure Power in connection with an alleged Indian bribery scheme.

Both the SEC and DOJ enforcement actions included a Foreign Corrupt Practices Act component (see here and here), but not as to Gautam Adani (a citizen of India and founder of the Adani Group which includes numerous portfolio companies including Adani Green Energy – and Indian energy company) and Sagar Adani (a citizen of India and Gautam Adani’s nephew and Executive Director of Adani Green’s Board of Directors) perhaps due to jurisdiction issues.

Nevertheless, Gautam Adani and Sagar Adani were civilly charged with securities fraud in connection with the same core conduct.

As alleged in the SEC civil complaint:

“In 2021, two senior executives of Adani Green Energy Ltd. (“Adani Green”)— Gautam Adani, Adani Green’s founder and controlling shareholder, and Sagar Adani, Adani Green’s Executive Director (collectively, “Defendants”)—engaged in a bribery scheme involving the equivalent of hundreds of millions of dollars to obtain contracts that benefitted Adani Green, while, at the same time, falsely touting the company’s compliance with antibribery principles and laws in connection with a $750 million bond offering (the “Offering”).

Gautam Adani founded Adani Green and Defendants are part of a four-person management team that controls it. For years, Defendants positioned Adani Green to investors and the public as a leader among its peers and within India in principles of good corporate governance, highlighting Adani Green’s purportedly rigorous anti-bribery and anti-corruption principles and policies, and seeking to appeal to investors who valued governance factors.

In September 2021, Defendants leveraged that narrative in the Offering to sell $750 million of Adani Green corporate bonds (“Notes”), including more than $175 million in Notes to investors in the United States.

In connection with the Offering, Adani Green told purchasers of the Notes that none of Adani Green’s directors or officers, including Defendants themselves, had paid or promised to pay bribes to government officials or attempted to unduly influence those officials. Adani Green and Defendants also emphasized to underwriters and potential investors that Adani Green had implemented robust anti-bribery and anti-corruption processes and that Adani Green was a leader in India in good corporate governance.

None of this was true. In the months and weeks before making these representations in connection with the Offering, Defendants were personally involved in paying or promising the equivalent of hundreds of millions of dollars in bribes to Indian state government officials to induce Indian state governments to enter into contracts necessary for Adani Green to develop India’s largest solar power plant project, from which Adani Green stood to earn billions of dollars.

A second company involved in that power plant project, Azure Global Power Limited (“Azure”), agreed to pay a portion of those bribes and Defendants were also personally involved in collecting payment from Azure.

Gautam Adani and Sagar Adani lied to purchasers of Adani Green’s Notes about Adani Green’s and their own involvement in a complex and high value bribery scheme. Those lies, made in connection with the offer and sale of Notes to investors in the United States, violated the antifraud provisions of the federal securities laws.”

Last week, the SEC announced:

“Without admitting or denying the allegations in the complaint, Gautam Adani and Sagar Adani each consented to the entry of final judgments, subject to court approval, that would permanently enjoin each from violating [various securities law provisions]. In addition, the final judgments, if approved by the court, would order Gautam Adani and Sagar Adani to pay civil monetary penalties of $6,000,000 and $12,000,000, respectively.”

In connection with the same core conduct Gautam Adani and Sagar Adani were also criminally charged with securities fraud conspiracy and wire fraud conspiracy.

Today, the DOJ filed a consent motion to dismiss the case, not just against the Adanis but other defendants as well.

The motion states;

“The government respectfully submits this motion, pursuant to Federal Rule of Criminal Procedure 48(a), requesting that the Court dismiss the indictment in this case with prejudice. The Department of Justice has reviewed this case and has decided, in its prosecutorial discretion, not to devote further resources to these criminal charges against individual defendants. See United States v. Blaszczak, 56 F.4th 230, 238-42 (2d Cir. 2022) (“The government may elect to eschew or discontinue prosecutions for any of a number of reasons. Rarely will the judiciary overrule the Executive Branch’s exercise of these prosecutorial decisions.”). No defendant has appeared. Counsel for all defendants consent to this relief.”

]]> 38142 New Director Of The SEC’s Division Of Enforcement Speaks https://fcpaprofessor.com/new-director-of-the-secs-division-of-enforcement-speaks/ Fri, 15 May 2026 12:41:14 +0000 https://fcpaprofessor.com/?p=38137 this speech.

Woodcock stated that his goals are "to return the enforcement program back to basics" with an "emphasis on quality over quantity."

Whether Woodcock's speech was relevant to the Foreign Corrupt Practices Act (part of the securities laws after all) is your call.

Off the rails FCPA enforcement by the SEC has been highlighted on these pages for years.



In pertinent part, Woodcock stated:
"I want to share a bit about how I intend to lead the Division.

Simply put, my role is to ensure that our staff are empowered, supported, and equipped to execute the Commission’s mission. I intend to provide hands-on leadership that allows our teams to focus on the fundamentals – the blocking and tackling if you will, with professionalism, efficiency, and fairness. In doing so, I am committed to ensuring the Division remains the global gold standard in securities law enforcement.

As a matter of first principles, my goals are aligned to those of Chairman Atkins: to return the enforcement program back to basics. That means vigorously protecting investors and safeguarding markets, while also providing transparency and certainty to those we regulate.

A quick aside, there has been considerable attention paid to the decline in the number of cases brought over the last several years. Let me be clear: this Commission has deliberately shifted toward an emphasis on quality over quantity, and I fully support that direction.

Our focus is, and will remain, on protecting investors and safeguarding markets from real harm. That means identifying and stopping fraud and manipulation in all its forms—for instance, offering frauds, accounting and disclosure fraud, insider trading, market manipulation, fraud by foreign actors targeting U.S. markets and investors, and breaches of fiduciary duties by advisers misusing client assets.

These are the types of cases contemplated when the Division was created, and these are the cases the Division intends to pursue aggressively during my tenure."

]]> David Woodcock (the new Director of the SEC’s Division of Enforcement) recently delivered this speech.

Woodcock stated that his goals are “to return the enforcement program back to basics” with an “emphasis on quality over quantity.”

Whether Woodcock’s speech was relevant to the Foreign Corrupt Practices Act (part of the securities laws after all) is your call.

Off the rails FCPA enforcement by the SEC has been highlighted on these pages for years.

In pertinent part, Woodcock stated:

“I want to share a bit about how I intend to lead the Division.

Simply put, my role is to ensure that our staff are empowered, supported, and equipped to execute the Commission’s mission. I intend to provide hands-on leadership that allows our teams to focus on the fundamentals – the blocking and tackling if you will, with professionalism, efficiency, and fairness. In doing so, I am committed to ensuring the Division remains the global gold standard in securities law enforcement.

As a matter of first principles, my goals are aligned to those of Chairman Atkins: to return the enforcement program back to basics. That means vigorously protecting investors and safeguarding markets, while also providing transparency and certainty to those we regulate.

A quick aside, there has been considerable attention paid to the decline in the number of cases brought over the last several years. Let me be clear: this Commission has deliberately shifted toward an emphasis on quality over quantity, and I fully support that direction.

Our focus is, and will remain, on protecting investors and safeguarding markets from real harm. That means identifying and stopping fraud and manipulation in all its forms—for instance, offering frauds, accounting and disclosure fraud, insider trading, market manipulation, fraud by foreign actors targeting U.S. markets and investors, and breaches of fiduciary duties by advisers misusing client assets.

These are the types of cases contemplated when the Division was created, and these are the cases the Division intends to pursue aggressively during my tenure.”

]]> 38137 Fugitive FCPA Defendant Seeks A Pardon https://fcpaprofessor.com/fugitive-fcpa-defendant-seeks-a-pardon/ Thu, 14 May 2026 13:17:26 +0000 https://fcpaprofessor.com/?p=38133 announced that Low Taek Jho (Jho Low - pictured), Ng Chong Hwa (Roger Ng – a former managing director at Goldman Sachs), and Tim Leissner (the former Southeast Asia Chairman at Goldman Sachs and Participating Manager Director) were charged with FCPA offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company. The individuals were also charged with conspiring to launder billions of dollars embezzled from 1MDB.

In 2020, based upon the same core conduct, Goldman Sachs resolved a net $1.66 billion FCPA enforcement action - the largest ever FCPA settlement.



Leissner pleaded guilty, was ordered to forfeit $43.7 million, and in 2025 was sentenced to prison for two years. (See here for the prior post).

In 2022, Ng was found guilty at trial of FCPA and related charges and in 2023 was sentenced to ten years in prison. (See here for the prior post).

Jho Low remains a fugitive and there has not been any entry on the court docket for the case in approximately three years.

However, according to the DOJ Office of the Pardon Attorney website, this year Low petitioned for a pardon. Below is the entry on the DOJ's website.



For additional reading, see here from the Wall Street Journal.



 

 

 ]]> In 2018, the DOJ announced that Low Taek Jho (Jho Low – pictured), Ng Chong Hwa (Roger Ng – a former managing director at Goldman Sachs), and Tim Leissner (the former Southeast Asia Chairman at Goldman Sachs and Participating Manager Director) were charged with FCPA offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company. The individuals were also charged with conspiring to launder billions of dollars embezzled from 1MDB.

In 2020, based upon the same core conduct, Goldman Sachs resolved a net $1.66 billion FCPA enforcement action – the largest ever FCPA settlement.

Leissner pleaded guilty, was ordered to forfeit $43.7 million, and in 2025 was sentenced to prison for two years. (See here for the prior post).

In 2022, Ng was found guilty at trial of FCPA and related charges and in 2023 was sentenced to ten years in prison. (See here for the prior post).

Jho Low remains a fugitive and there has not been any entry on the court docket for the case in approximately three years.

However, according to the DOJ Office of the Pardon Attorney website, this year Low petitioned for a pardon. Below is the entry on the DOJ’s website.

For additional reading, see here from the Wall Street Journal.

 

 

 

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