This month, companies undergoing formal investigation spanned several stages of U.S. Foreign Corrupt Practices Act ("FCPA") enforcement, providing some interesting anti-bribery lessons.  Cubist Pharmaceuticals, Inc. disclosed that the U.S. Securities and Exchange Commission ("SEC") and U.S. Department of Justice ("DOJ") began investigating Cubist in relation to a global biopharmaceutical company, Optimer Pharmaceuticals, that it acquired late last year for USD $551 million.  The SEC and DOJ investigation is in connection to an attempted share grant by Optimer Pharmaceuticals in 2011 and a potentially improper payment to a research laboratory involving an individual associated with the share grant. 

Cobalt International Energy, Inc. disclosed that it had received a Wells Notice, stating that the SEC made a preliminary determination to initiate an FCPA enforcement action against the company for improper payments allegedly made in Angola.  The allegations involve the hiring of two local contractors by Cobalt to fulfill a public contract, allegedly at the request of Angolan government officials.  Several senior Angolan government officials owned shares in the two local companies.

Layne Christensen Company received a declination after four years of investigation by the DOJ.  The company discovered potential violations of the FCPA related to the legality of certain payments to customs clearing agents in connection with importing equipment into the Democratic Republic of Congo, and other countries in Africa, while updating its anti-bribery policy in 2010.  Layne Christensen made a voluntary disclosure to the U.S. authorities, and the SEC investigation is ongoing.  Following the DOJ declination, Layne Christensen reduced its reserve for a potential FCPA settlement from USD $10.4 million to USD $5.3 million.

There have also been developments for News Corp., Volkswagen AG, Qualcomm Inc., SBM Offshore, Haiti Teleco and Siemens.

China announces Investigation into Volkswagen AG's China Joint Venture -  China's anti-corruption authority - the Central Commission for Discipline Inspection - has reportedly opened an investigation into two top executives at the joint venture between the German automaker and state-owned FAW Group Corp.  Audi, Volkswagen's luxury unit, is also involved in a probe by Chinese anti-monopoly regulators regarding inflated vehicle and spare part prices.

Tanzania Takes Positive Steps Towards Curbing Corruption -  The country's Prevention and Combating of Corruption Bureau (PCCB) recently announced that law enforcement have filed 327 cases over the past year and recovered about TZS 40 billion (roughly USD $24 million) during that time period as well.   The government also recently announced that it was setting up a special unit to monitor oil and gas revenues, including training auditors on how to manage and oversee lucrative contracts with foreign multinationals. 

U.S. Tennis Association Comes Under Scrutiny - A New York Times article has created a stir for the U.S. Tennis Association, pointing out possible conflicts of interest between several of the group's current and recent board members and recent U.S.T.A. grants and contracts.  The paper alleges that at least $3.1 million worth of U.S.T.A. contracts have gone to organizations with ties to board members.

Cobalt International Receives Warning Shot From SEC -  The US oil company announced that it had received a Wells Notice from the SEC this month, which warned that the company faced an enforcement action for breaches of certain federal securities laws.  The notice is thought to be linked to alleged breaches of the Foreign Corrupt Practices Act (FCPA) pertaining to certain offshore oil deals in Angola. Following news of the notice, Cobalt shares fell by more than 10% and several shareholder plaintiffs firms announced that they too were investigating whether to bring actions against the company.

Vote now on the TRACEblog. 

The 2014 TRACE Commission Benchmarking Project provides data on the average commission rates paid to third parties on a country-specific basis for business-to-government deals based on four deal sizes. Each segment covers four or five countries within a region. The results for the South America segment are now available. Companies that participated should have received a copy of the results. If you participated but did not receive a copy, please email hsieh@TRACEinternational.org. 

You may now access the survey for the Middle East segment, which includes Saudi Arabia, Israel, United Arab Emirates, Oman and Egypt, here. Survey responses are submitted anonymously, so please register your company's participation via email to hsieh@traceinternational.org to receive a copy of the results. 

Please submit only one response per company by Monday, September 1^st, 2014. 

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