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Bank Settles DOJ and SEC Charges for FCPA Violations

A bank settled DOJ and SEC charges for Foreign Corrupt Practices Act ("FCPA") violations in connection with its use of third-party intermediaries, business development consultants and finders (collectively, "BDCs") in order to acquire and maintain global business.

In the charging documents filed with the U.S. District Court for the Eastern District of New York and the SEC, respectively, the government alleged that the bank engaged with BDCs in Abu Dhabi, Saudi Arabia, China and Italy that were not sufficiently vetted for bribery risks. Specifically, the bank did not take adequate steps to mitigate bribery risks posed by engagement with such BDCs, failing to implement sufficient internal accounting controls relating to the payment of such BDCs and the purpose of their engagements. As a result, the government found that the bank failed to detect and prevent bribery payments made to BDCs for "unknown, undocumented or unauthorized services." Additionally, the government alleged that senior management was aware that its employees falsified books and records in relation to the transactions with the BDCs.

In separate charges, the DOJ alleged that the bank engaged in illegal spoofing in violation of the Commodity Exchange Act.

To settle the DOJ's charges, the bank agreed to pay (i) an $85,186,206 civil money penalty, (ii) $681,480 in criminal disgorgement and (iii) $1,223,738 in victim compensation payments. To settle the SEC's charges, the bank agreed to (i) cease and desist from future violations and (ii) $43,329,622 in disgorgement and prejudgment interest.

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Sub-Activity: 
Spoofing / Wash Trades / Manipulation
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SEC-Registered Issuers
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