a. Focus on the Foreign Corrupt Practices Act (FCPA): Update to our ongoing monthly FCPA coverage.
i. On January 26, 2017, the DOJ announced that it had charged two former executives of hedge fund Och-Ziff Capital Management Group (Och-Ziff) with being the "driving forces behind a far-reaching bribery scheme" that violated the FCPA. We reported on the DOJ's resolution with Och-Ziff, its first FCPA resolution with a hedge fund, in our November 2016 newsletter under "FCPA Focus—SEC Edition."
ii. On January 19, 2017, the DOJ announced that Nevada-based gaming and resort company Las Vegas Sands Corp. agreed to pay a $6.96 million criminal penalty to resolve violations of the FCPA in connection with business transactions in the People's Republic of China and Macao.
b. SEC whistleblower program: Update to our ongoing reporting about the SEC's whistleblower program, most recently in our February 2017 newsletter under "Give a Little Whistle—SEC Whistleblower Program Update."
On January 23, 2017, the SEC announced that it had granted an award of over $7 million to be split among three whistleblowers as follows: "One whistleblower provided information that was a primary impetus for the start of the SEC's investigation. That whistleblower will receive more than $4 million. Two other whistleblowers jointly provided new information during the SEC's investigation that significantly contributed to the success of the SEC's enforcement action. Those two whistleblowers will split more than $3 million."
c. Car trouble: Update to the story in our February 2017 newsletter entitled "When Regulatory Failings Turn Criminal: Car Edition Redux."
On February 1, 2017, Volkswagen announced that it had agreed to pay an additional $1.2 billion to settle consumer and FTC civil claims in connection with the diesel emissions scandal.
2. Briefly noted: A couple of other enforcement actions bear note.
a. On January 23, 2017, the SEC announced that it had charged shipping conglomerate Overseas Shipholding Group (OSG) and its former chief financial officer Myles R. Itkin with "failing to recognize hundreds of millions in tax liabilities in its financial statements that had accumulated over nearly 12 years resulting from its controlled foreign subsidiary guaranteeing OSG's debt that had been borrowed under various credit financing agreements." The SEC said that, as a result, "OSG materially understated its income tax liabilities by approximately $512 million (17 percent) of its total liabilities." The SEC noted that OSG had filed for bankruptcy protection in November 2012 following the discovery of the tax liabilities.
b. On January 19, 2017, the DOJ announced that Costco Wholesale (Costco) agreed to pay $11.75 million to settle allegations that its pharmacies violated the Controlled Substances Act when they improperly filled prescriptions for controlled substances. The DOJ said that the settlement resolves allegations that "Costco pharmacies filled prescriptions that were incomplete, lacked valid Drug Enforcement Administration (DEA) numbers or were for substances beyond various doctors' scope of practice" and "failed to keep and maintain accurate records for controlled substances at its pharmacies and centralized fill locations."