TOP PROSECUTOR LEAVING THE U.S. DEPARTMENT OF JUSTICE
Acting Assistant Attorney General of the Department of Justice's Criminal Division, Mythili Raman, announced on February 26 that she will be leaving the Department, effective March 21, 2014. Over the past year, the Criminal Division under Raman's leadership secured three of the ten biggest corporate FCPA resolutions ever in suits involving Total SA, Weatherford International, and Alcoa. In addition, Raman led the Division in the launch of an investigation of alleged manipulation of foreign exchange rates and the charging of six individuals at two financial institutions in connection with manipulation of the LIBOR. A Senate panel is considering President Obama's nominee to replace Raman. Leslie Caldwell was the head of the Department of Justice's special taskforce charged with the Enron Corporation investigation and prosecution.
FORMER SIEMENS EXECUTIVES GET RECORD FINES UNDER FCPA
On February 4, 2014, U.S. District Court judge Shira Scheindlin ordered two former Siemens executives to each pay a record $524,000 civil penalty, in addition to approximately $414,000 in disgorgement, the largest civil penalty ever for an individual in a corporate Foreign Corrupt Practices Act case. The two execs, along with five other Siemens employees, were implicated in allegations that Siemens paid $100 million in bribes to obtain a $1 billion contract from the Argentine government to produce national identities cards. These allegations resulted in the 2008 record-setting $800 million settlement by Siemens AG of a Foreign Corrupt Practices Act bribery investigation.
The Securities and Exchange Commission brought its case against the Siemens employees in December 2011 for violations of the FCPA's anti-bribery provision and the Exchange Act's books and records provision. The two executives never responded to the SEC's complaint and the SEC moved for default judgment in November 2013.
SEC AMICUS BRIEF SEEKS TO PROTECT INTERNAL WHISTLEBLOWERS
On February 20, the SEC filed an amicus brief in a Second Circuit case involving a former China-based Siemens employee in which the SEC argues that internal whistleblowers are entitled to employer anti-retaliation protection, even if they only report the wrongdoing to their employer and not the SEC. Companies, on the other hand, have argued that the definition of protected "whistleblower" under the Dodd-Frank Wall Street Reform and Consumer Protection Act does not include employees who report fraud internally. However, the SEC asserts that there is no justification for creating a two-tiered system for internal whistleblowers and those who go to the SEC.
NO FIFTH AMENDMENT PROTECTION FOR REQUIRED FOREIGN BANK ACCOUNT RECORDS
In December, the Second Circuit affirmed a contempt finding for the failure to produce to a grand jury records of foreign bank accounts that are compulsory under the Bank Secrecy Act. The BSA requires taxpayers to disclose offshore accounts and maintain records regarding those accounts for at least five years. In response to an individual's contention that he had a Fifth Amendment right to refuse to produce foreign bank records, the Court held that the "required records" exception to the Fifth Amendment privilege against self-incrimination applied to records mandated by BSA regulations. In Re Grand Jury Subpoena Dated February 2, 2012.