By Reuters Staff
4 Min Read
(Reuters) - Simandou in Guinea is home to the world’s richest untapped deposits of iron ore but legal wrangling, alleged corruption and the difficulty of access to the mountain region mean it has yet to be developed.
Israeli billionaire Beny Steinmetz arrives at a courthouse ahead of the verdict of the trial for corruption and forgery charges in connection with mining contracts in Guinea, in Geneva, Switzerland January 22, 2021. REUTERS/Denis Balibouse
On Friday, a Swiss criminal court found Israeli businessman Beny Steinmetz guilty of corruption and sentenced him to five years in jail over a mining deal his company secured for the Simandou project. Steinmetz has said he will appeal the verdict.
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This week I am considering the recent settlement by the Department of Justice (DOJ) with The Boeing Company (Boeing) around its fraud in the certification of its 737 MAX aircraft. The resolution was via a Deferred Prosecution Agreement (DPA). Under the DPA, Boeing agreed to pay a total amount of $2.5 billion. According to a DOJ Press Release, this total amount consisted of “a criminal monetary penalty of $243.6 million, compensation payments to Boeing’s 737 MAX airline customers of $1.77 billion, and the establishment of a $500 million crash-victim beneficiaries fund to compensate the heirs, relatives, and legal beneficiaries of the 346 passengers who died in the Boeing 737 MAX crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302.” This enforcement involved a fraud by Boeing on the US government.
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On January 8, 2021, the SEC issued a cease-and-desist order, Release No., 90875 (available here), formally resolving proceedings against Deutsche Bank AG. Deutsche Bank agreed to pay over $125 million as part of a global resolution of allegations that it violated the Foreign Corrupt Practices Act of 1977 (FCPA), in connection with its use of third-party intermediaries, business development consultants, and finders engaged to advance Deutsche Bank’s global business development efforts. The terms of Deutsche Bank’s universal settlement with the SEC and the U.S. Department of Justice included payment of more than $120 million, $43 million of that to resolve charges brought by the SEC, and the remainder in the form of criminal penalties paid to the Department of Justice.
It’s hardly a secret that Deutsche Bank has become a standout in the universe of badly managed big banks. But thanks to news flow overwhelm, we’ve been slow to write up an important suit, Rosenfeld v. Achleitner that lays out the misconduct over the last decade and is out to ding the executives and directors, or more accurately, their very fat D&O policies, for the abuses (Paul Achleitner is Deutche’s long-standing and very connected chairman of the board). We’ve embedded both the original complaint and the brief in opposition to the defendants’ Motion to Dismiss. The text of the later filing isn’t that long; the big page count comes from inclusion of all the exhibits.
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Recent developments include updated DOJ compliance guidance, a continued rise in FCPA proceedings and penalties, and new investigatory approaches in light of the pandemic.
2020 saw many important developments in US white collar enforcement, driven by Administration priorities, business trends and practices, and the realities of COVID-19. The legal and business communities paid particular attention to the US Department of Justice’s (DOJ’s) updated guidance on “Evaluation of Corporate Compliance Programs,” the growing number of contentious Foreign Corrupt Practices Act (FCPA) proceedings (matched by significant penalties), and the impact of the COVID-19 pandemic on investigative strategies by regulators and corporate compliance programs. Now, with the United States transitioning to a new administration, it is yet to be seen whether these trends will continue and what other changes may be in store.