Insights

The world has watched in horror as tragedy has unfolded in Israel because of the brutal terrorist attacks carried out by Hamas.  Nothing can compensate for the devastating loss of life, for the trauma suffered by those injured or kidnapped, or for the grief, sorrow, fear, and anger felt by family members.  For the past twenty-five years, American victims or family members have held Iran accountable in U.S. courts for its sponsorship and support of murderous and terrorist acts like those carried out by Hamas in Israel.  The U.S. legal system may again be a vehicle to hold Iran and its proxies to account today.

On May 6, 2020, the United States Department of Education issued the final rule setting out new regulations governing institutions’ response to sexual harassment and assault allegations under Title IX. Following their November 2018 release in a proposed rulemaking (NPRM), the much-anticipated regulations, Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance, will have the full force of law, unlike prior guidance. The new regulations, issued after the filing of more than 124,000 public comments on the NPRM, require all institutions receiving federal funding to comply by August 14, 2020.

Amidst the COVID-19 pandemic and increased uncertainty on campuses across the country over enrollment, instructional modes, and revenue planning, the United States Department of Education (DoE) is poised to issue the final rule implementing Title IX. The regulations have been in the “Final Rule Stage” since November 2019, and the Office of Management and Budget (OMB) review concluded March 27, 2020. 

For at least the third time this year, a civil case has been brought in U.S. federal court alleging conduct that, if proven, would likely constitute a violation of the Foreign Corrupt Practices Act.

Recent FCPA arrests demonstrate continued emphasis on prosecuting individuals. The Department of Justice announced last week the arrest and indictment of four individuals on charges that they and their company, Nexus Technologies, Inc., paid at least $150,000 in bribes to Vietnamese officials to obtain contracts to supply the Vietnamese government with technology and equipment, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts, and air tracking systems. Nexus Technologies was also indicted and has not entered a plea or deferred prosecution agreement. The company, which is incorporated in Delaware and has offices in Philadelphia, New Jersey, and Ho Chi Minh City, Vietnam, is in the business of procuring equipment and consulting services for various sectors, including the petroleum, power generation, civil aviation, and maritime industries. The individual defendants were identified as Joseph Lukas, An Nguyen, Kim Nguyen, and Nam Nguyen, all of whom are U.S. citizens.

Recent FCPA arrests demonstrate continued emphasis on prosecuting individuals. The Department of Justice announced last week the arrest and indictment of four individuals on charges that they and their company, Nexus Technologies, Inc., paid at least $150,000 in bribes to Vietnamese officials to obtain contracts to supply the Vietnamese government with technology and equipment, including underwater mapping equipment, bomb containment equipment, helicopter parts, chemical detectors, satellite communication parts, and air tracking systems. Nexus Technologies was also indicted and has not entered a plea or deferred prosecution agreement. The company, which is incorporated in Delaware and has offices in Philadelphia, New Jersey, and Ho Chi Minh City, Vietnam, is in the business of procuring equipment and consulting services for various sectors, including the petroleum, power generation, civil aviation, and maritime industries. The individual defendants were identified as Joseph Lukas, An Nguyen, Kim Nguyen, and Nam Nguyen, all of whom are U.S. citizens.

Just in time for the holidays, on December 21, 2007, DOJ and the SEC respectively announced settlements with Lucent Technologies Inc. – now a subsidiary of Alcatel-Lucent – of allegations that Lucent had violated the Foreign Corrupt Practices Act by providing officials of Chinese government owned or controlled customers with excessive travel and entertainment in the United States. These settlements – a non-prosecution agreement with DOJ and a civil settlement with the SEC – apparently close an investigation first publicly announced some years back with the April 2004 dismissal of four of Lucent’s senior executives in China.

As U.S. regulators continue to explore new, more aggressive ways to prosecute foreign bribery under the Foreign Corrupt Practices Act, the Department of Justice has sent a clear warning that prosecution is not reserved for publicly traded companies on U.S. exchanges or their executives.

On December 11, Robert W. Philip, the former President, CEO, and Chairman of the Board of Schnitzer Steel Industries agreed to pay more than $250,000 to settle charges with the Securities and Exchange Commission that he violated the U.S. Foreign Corrupt Practices Act. Last year, Schnitzer Steel and its Korean subsidiary paid more than $15 million and entered into, respectively, a deferred prosecution agreement and corporate guilty plea to settle related charges by the SEC and the U.S. Department of Justice. Then in June 2007, Si Chan Wooh, another SSI executive, pled guilty and settled with the SEC for his involvement in the scheme which involved bribes and kickbacks to government and privately owned steel mills in China, Japan and Korea.

On July 23, the Department of Justice announced the indictment of Jason Edward Steph, a former executive of Willbros International Inc. (WII), a subsidiary of Houston-based Willbros Group Inc., on charges of conspiring to violate the Foreign Corrupt Practices Act and money laundering.

The Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) announced yesterday that Baker Hughes, Inc. and its wholly owned subsidiary, Baker Hughes Services International Inc. (BHSI), agreed to pay a record $44 million in fines, penalties and disgorgement to settle criminal charges and a related civil complaint. The allegations include violations of the anti-bribery and books and records and internal control provisions of the Foreign Corrupt Practices Act (FCPA).

Yesterday, a Miami federal grand jury indicted a second former executive of Alcatel, S.A., a French telecommunications company, for violations of the Foreign Corrupt Practices Act. The indictment supersedes a December 2006 indictment of another former Alcatel executive and charges both with conspiring to make over $2.5 million in indirect payments through a foreign “consulting” firm to Costa Rican officials in order to obtain a telecommunications contract on Alcatel’s behalf.

U.S. Deputy Attorney General Paul J. McNulty announced yesterday that the Department of Justice has superseded the recently embattled “Thompson Memo” setting forth “Principles of Federal Prosecution of Business Organizations.” The new guidelines, embodied in a document already branded the “McNulty Memo,” depart from the Thompson Memo in two important areas: (i) waivers of attorney-client privilege and work-product protections; and (ii) advancement of legal fees to employees under investigation and indictment."

U.S. Deputy Attorney General Paul J. McNulty announced yesterday that the Department of Justice has superseded the recently embattled “Thompson Memo” setting forth “Principles of Federal Prosecution of Business Organizations.” The new guidelines, embodied in a document already branded the “McNulty Memo” depart from the Thompson Memo in two important areas: (i) waivers of attorney-client privilege and work-product protections; and (ii) advancement of legal fees to employees under investigation and indictment.