President Joe Biden stated in his inaugural address, “We can make America, once again, the leading force for good in the world.”  Fighting corruption, both domestically and internationally, has been a focus of the Biden administration in its first year in office.  The federal government has many tools in its shed to combat corruption around the world.  Those tools include prosecution of honest services fraud in the United States under the mail and wire fraud statutes.  The federal government can also use the securities fraud statutes to combat corruption in connection with public bond offerings.  The False Claims Act can also be a major tool in combatting bribery on the part of government contractors.  However, those tools are largely limited to domestic corruption.  The United States’ most effective tool in combatting corruption around the world is the Foreign Corrupt Practices Act (“FCPA”).  During the four years of the Trump administration, FCPA investigations initiated dropped by nearly 80%, and it has been widely expected that FCPA investigations would see a sharp uptick under the Biden administration.  We are likely seeing the beginning of that trend.

On June 25, the Securities and Exchange Commission (“SEC”) announced that it had charged Amec Foster Wheeler Limited (“Foster Wheeler”) with violations of the FCPA stemming from a bribery scheme in Brazil.  The SEC alleged that Foster Wheeler sought to obtain an oil and gas engineering and design contract from Petroleo Brasileiro S.A., a Brazilian state-owned oil company.   Foster Wheeler’s UK subsidiary allegedly made illegal payments to Brazilian officials in an attempt to obtain the contract. The SEC identified failures in Foster Wheeler’s due diligence process for vetting third party agents because one of the third-party agents alleged to have paid bribes to Brazilian officials had failed the company’s due diligence process.  The SEC alleged that Foster Wheeler paid approximately $1.1 million in bribes to Brazilian officials as part of this scheme.   Following the investigation, Foster Wheeler agreed to pay more than $43 million to the U.S., U.K., and Brazilian governments, with $10.1 million being paid to the SEC.

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with SEC investigations and related securities litigation.  If you need assistance with such a matter, please contact us today.