MyUniversity. Discover why over 18,000 Asset Management Executives use RCA Curricula and Member Services.

Transcription

1 Disclaimer PRACTICEDGE SERIES DELIVERED BY THE RCA, ITS ENDOWING ORGANIZATIONS AND AFFILIATE LAW SCHOOLS CONSTITUTE A PREVIEW OF A RESPECTIVE CLASS SESSION IN THE LAW & MASTERS CONCENTRATION OR MYUNIVERSITY. THE PRACTICEDGE SERIES IS INTENDED FOR INFORMATIONAL PURPOSES. THE COMMENTS MADE BY EACH MEMBER OF THE SPEAKING FACULTY REPRESENT THEIR PERSONAL VIEW, AND NOT THE POSITION OF THE REGULATORY COMPLIANCE ASSOCIATION (RCA), ITS ENDOWING ORGANIZATIONS, AFFILIATE LAW SCHOOLS OR UNIVERSITIES, OR A SPEAKER S FIRM OR ORGANIZATION. ADDITIONALLY, THE VIEWS EXPRESSED AND MATERIALS PROVIDED DO NOT CONSTITUTE LEGAL OR PROFESSIONAL ADVICE, OR EVEN A MODEL OF THE SAME, APPLICABLE TO ANY SPECIFIC MATTER. LASTLY, THE RCA AND OUR ENDOWING FIRMS ASSUME NO LIABILITY FOR ANY ACTIONS OR COMMENTS OF THE SPEAKING FACULTY - SUCH INDIVIDUALS REMAIN SOLELY LIABLE FOR THE SAME.

2 MyUniversity Discover why over 18,000 Asset Management Executives use RCA Curricula and Member Services. MyUniversity Delivers: Enterprise Class, Private Labeled Intranet of Knowledge ; Over 900 hours of CPE, 600 hours of CLE and 600 hours of Continuing Compliance Education (updated monthly); The most timely, relevant, and vetted Course Materials Dedicated Academic Team with 24/7 service and support. Curriculum includes over 110 Courses: Spanning 12 Practice Areas: Asset Management Law, Regulation, Compliance, Exams, Investigations, Enforcement, Operational Process, Due Diligence, Risk Management, Governance, Fund Accounting and Taxation Detailed, comprehensive and unbiased coverage of over 4, 000 subjects Over 10,000 pages of Textbooks and Course Materials Practical and actionable guidance, including extensive case studies

3 PracticEdge Elite Discover why over 18,000 Asset Management Executives use RCA Curricula and Member Services. PracticEdge Elite Delivers: Enterprise Class, Private Labeled Intranet of Knowledge ; Over 110 hours of CPE, 70 hours of CLE and 70 hours of Continuing Compliance Education (updated monthly); The most timely, relevant, and vetted Course Materials Dedicated Academic Team with 24/7 service and support. Curriculum includes over 35 Courses: Spanning 12 Practice Areas: Asset Management Law, Regulation, Compliance, Exams, Investigations, Enforcement, Operational Process, Due Diligence, Risk Management, Governance, Fund Accounting and Taxation Detailed, comprehensive and unbiased coverage of over 4, 000 subjects Over 1,500 pages of Textbooks and Course Materials Practical and actionable guidance, including extensive case studies For more information, please contact the RCA at or visit

4 The FCPA and the Rise of Global Anti-Corruption Enforcement

5 Session Agenda Understanding the FCPA s Requirements Insight into Recent Enforcement Trends Recent Examples of International Enforcement Implications of Multi-Jurisdictional Enforcement 2

6 Understanding the FCPA s Requirements Who enforces the FCPA? U.S. Department of Justice ( DOJ ) U.S. Securities and Exchange Commission ( SEC ) 3

7 Understanding the FCPA s Requirements: Anti-Bribery Who is covered by the FCPA? Issuers Domestic Concerns Territorial Jurisdiction 4

8 Understanding the FCPA s Requirements: Anti-Bribery What is covered by the FCPA? Business Purpose Test Payments made corruptly Willfulness mental state Anything of Value 5

9 Understanding the FCPA s Requirements: Books & Records Provision applies to Issuers Books and Records requirements: Must in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer Reasonable detail : detail that would satisfy prudent officials in the conduct of their own affairs Never OK to mischaracterize/cover up payments 6

10 Understanding the FCPA s Requirements: Internal Controls Must be sufficient to provide reasonable assurances that : Transactions executed in accordance with management s authorization Transactions recorded to enable preparation of financial statements under GAAP and accounting for assets Access to assets only allowed in accordance with management s authorization Recorded accountability of assets is compared with existing assets at reasonable intervals; appropriate action taken as to differences 7

11 Insight into Recent Enforcement Trends: Expanded Application of Internal Controls Enforcement SEC expands enforcement for internal controls, books and records violations BHP Billiton Settlement Mead Johnson Settlement Hitachi Settlement 8

12 Insight into Recent Enforcement Trends: Yates Memo DOJ to enhance efforts to hold individuals responsible in prosecutions concerning corporate wrongdoing Key Factors for Corporations: No eligibility for cooperation credit without providing relevant facts about individuals involved in misconduct All investigations should focus on individual wrongdoing DOJ criminal, civil attorneys handling investigations will have constant communication Absent extraordinary circumstances, resolutions will not give protection for individuals No resolutions without a clear plan to resolve related individual cases before limitations period expires; declinations must be memorialized and approved Civil enforcement: Gov t will evaluate whether to sue based on considerations beyond ability to pay 9

13 Insight into Recent Enforcement Trends Importance of Voluntary Disclosure Generally Yates Memo: strong indication that voluntary disclosure is key to DOJ s assessment of corporate cooperation SEC: voluntary disclosure required before DPA or NPA will be considered 10

14 Recent Examples of International Enforcement China Continued heavy emphasis on fighting internal corruption Focus on political figures United Kingdom SFO prosecutions gaining momentum in Brazil Recently enacted regulations under Clean Companies Act Compliance programs, sound books and records critical 11

15 Coordination with Foreign Enforcement Authorities AAG Caldwell: [W]e increasingly find ourselves shoulder-toshoulder with law enforcement and regulatory authorities in other countries. Every day, more countries join in the battle against transnational bribery. And this includes not just our long-time partners, but countries in all corners of the globe. Examples of international coordination: Brazil, United States coordinating in Petrobras probe SEC, DOJ received cooperation from Germany, Poland in Hewlett- Packard probe SEC received assistance from multiple international agencies in Alcoa probe 12

16 Recent Examples of International Enforcement: Some Emerging Areas of Risk for Private Investment Perspective of the DOJ 13

17 Recent Examples of International Enforcement: Some Emerging Areas of Risk for Private Investment Sovereign Wealth Fund Investments How to handle accepting investments by Sovereign Wealth Funds? How to handle Placement Agents in foreign jurisdictions? Due diligence on Sovereign Wealth Funds 14

18 Implications of Multi-Jurisdictional Enforcement: Compliance Programs Weaving anti-corruption awareness into fabric of an organization Difficulty assessing jurisdictional reach of anti-corruption laws Conflicting laws can create a global most stringent standard 15

19 Implications of Multi-Jurisdictional Enforcement: Compliance Programs Implementation across global entities Difficulties maintaining an international compliance program Conducting international due diligence Investing in foreign jurisdictions 16

20 Implications of Multi-Jurisdictional Enforcement: Compliance Programs Constructing compliance programs for hedge funds, other private funds Identifying the risks Due diligence Auditing Training 17

21 Implications of Multi-Jurisdictional Enforcement: Compliance Programs Importance of Internal Controls Preventing a violation Demonstrating commitment to compliance to the Government Garth R. Peterson Case Minimizing scope of problems if and when they occur Increasing likelihood of discovering and addressing problems before third parties learn of them (e.g., Government, media) 18

22 Implications of Multi-Jurisdictional Enforcement: Internal Investigations Document collections under competing data privacy laws Conflicts between U.S. and E.U. data privacy regimes Different rights and privileges in different jurisdictions Issues to investigate vary depending on which laws apply 19

23 Implications of Multi-Jurisdictional Enforcement: Resolutions of Enforcement Actions Difficulty reaching global settlements with multiple agencies Significance of agency competition? Significance of collateral effects of settlements Impact of a guilty plea in the U.S. on European business? 20

24 Closing Remarks

25 Speaking Faculty Biographies

26 John Buretta, JD, Partner, Litigation, Cravath Swaine & Moore John D. Buretta is a partner in Cravath s Litigation Department. His practice focuses on advising corporations, board members and senior executives with respect to internal investigations, criminal defense and regulatory compliance, including matters related to the FCPA, antitrust, fraud, insider trading, money laundering and anti-money laundering controls, trade sanctions and export controls. He has advised global companies in the banking, private investment, energy, aircraft, publishing, information, communications, technology, food and pharmaceutical sectors. In 2014, Ethisphere Institute named Mr. Buretta a Top Gun in its list of Attorneys Who Matter. He was also recognized by the 2015 edition of Benchmark Litigation for his work in the area of white collar crime and investigations. Mr. Buretta joined Cravath in 1996 as a litigation associate. In 2002 he left and began over ten years of service in the Department of Justice. Mr. Buretta completed his time at the DOJ as the number-two ranking official in the Criminal Division as Principal Deputy Assistant Attorney General and Chief of Staff from February 2013 to October In this role, he oversaw nearly 600 prosecutors on complex matters involving corporate fraud, FCPA, insider trading, health care fraud, money laundering, Bank Secrecy Act, trade sanctions, asset forfeiture, cybercrime, intellectual property theft, public corruption and other criminal investigations. 23

27 Matthew Queler, JD, Assistant Chief, FCPA Unit, United States Department of Justice Matthew Queler is an Assistant Chief in the Fraud Section of the Department of Justice s Criminal Division. He is a supervisor in the Fraud Section s FCPA Unit, having re-joined the Department in August There he supervises and handles some of the most complex FCPA investigations being handled by the Department. Prior to that, Matthew was a Partner at Proskauer Rose, where, as part of the Corporate Defense & Investigations Group, his practice focused on corporate internal investigations, white collar criminal defense, and SEC enforcement actions. While at Proskauer, Matthew developed extensive experience in FCPA matters, having conducted global FCPA internal investigations and defended clients in FCPA investigations by the DOJ and the SEC. He also regularly advised clients on a wide array of FCPA issues, and conducted FCPA policy and procedure reviews, FCPA compliance audits, pre-m&a FCPA due diligence, and FCPA training sessions for clients. Matthew previously served as the Co-Chair of the FCPA and Anti-Corruption Sub-Committee for the American Bar Association s Business Law Section, White Collar Crime Committee. Before joining Proskauer, Matthew served from 1998 to 2003 as an Assistant U.S. Attorney in the District of New Jersey, where he successfully prosecuted numerous cases involving federal criminal violations. As a federal prosecutor, Matthew also was an inaugural member of New Jersey s Anti-Terrorism Task Force. Prior to that, Matthew clerked for the Honorable William G. Bassler (retired), U.S. District Judge, District of New Jersey. Matthew graduated magna cum laude and Phi Beta Kappa from Yale University, and cum laude from Harvard Law School. 24

28 Moshe Luchins, JD, Deputy General Counsel & Compliance Officer, Zewig-DiMenna Associates Moshe Luchins is the Deputy General Counsel and Compliance Officer of Zweig-DiMenna Associates LLC. Zweig- DiMenna is among the most experienced long/short equity hedge fund managers. Moshe has a broad range of legal and compliance responsibilities on behalf of the Zweig-DiMenna hedge funds, investment advisers and in-house broker-dealer. Moshe is a frequent speaker at industry panels. He holds Series 7 and 24 FINRA registrations. Moshe serves on the Board of Directors of the Jewish Family Services and Children's Center of Clifton-Passaic. Moshe received his JD from the Columbia University School of Law and he holds a BA from Touro College. 25

29 Adam Schreck, JD, General Counsel, Discovery Capital Management Adam Schreck is the General Counsel of Discovery Capital Management. Mr. Schreck was also Discovery s Chief Compliance Officer until January Prior to joining Discovery in February 2011, Mr. Schreck was an attorney in the Investment Management Group at Seward & Kissel LLP. While at Seward & Kissel, he specialized in the formation and ongoing representation of U.S. and offshore hedge funds, fund of funds and private equity funds. Mr. Schreck graduated magna cum laude from Yeshiva University and received his JD from the University of Pennsylvania Law School. 26

30 Marnix Somsen, LLM, Partner, De Brauw Blackstone Westbroek Marnix Somsen specializes in regulatory and criminal enforcement. He represents corporations and financial institutions subject to investigation and enforcement proceedings. His experience spans both the US, Europe, Africa and Asia. Recent work includes representing publicly listed companies in enforcement actions brought by the SEC, the FED, OFAC, BIS, the DoJ, the CFTC, the FCA, the SFO, BaFin, the AMF, the HKMA, the MAS, the JFSA, DNB, the OM and the AFM on a variety of regulatory and criminal charges. Currently head of our Corporate Criminal Defence, Compliance & Investigations practice in New York, Marnix and the team divide their time between the US and the EU, typically handling cross-border enforcement matters and internal investigations for EU companies involving one or more US or other foreign regulators, drawing upon the resources of our international Best Friends network. Over the past few years, issues have included: Libor and other financial benchmarks, FCPA and UKBA, other anti-bribery statutes, international sanction programs (UN, US, EU, Worldbank), export controls, anti-money laundering, insider trading, market & price manipulation, banking & securities fraud, regulatory compliance failures. Marnix s work typically includes international coordination among local law firms, reputational damage mitigation, remedial & disciplinary measures, press relations, market disclosures, dealing with whistleblowers and managing voluntary self-disclosures. He and the team are consistently ranked tier 1, with personal reports ranging from highly skilled and knowledgeable (Legal 500) to excellent legal brain (IFLR 1000) and his team praised as market leaders when it comes to regulatory work and leading white collar team (IFLR 1000). Currently the co-chair of the IBA Anti-Corruption Committee for the Netherlands, Marnix has recently co-edited Onderneming en Sanctierecht, a Nijmegen University textbook on regulatory and criminal enforcement. Formerly an editor in chief of Tijdschrift voor Sanctierecht & Compliance, the Dutch enforcement & compliance law review, Marnix now serves on its Board of Advisors. 27