FCPA Predictions for 2019
Here we go – another year, another set of predictions. Who knows whether they will come true?
Actually, I went back and read my annual prediction posting for 2018 and 2017, respectively. Some things I called correctly, and others I missed the mark on.
One consistent error – the Wal-Mart FCPA case would be resolved. So this year, I am employing reverse psychology. The Wal-Mart FCPA case will NOT be resolved in 2019.
A prediction I am proud of – I predicted 25 individual criminal prosecutions in 2018, and I was off by one – 26 occurred. For 2019, I will go out on a limb and predict at least 35 individual criminal prosecutions.
So here goes on more predictions for 2019.
Aside from an increase in the number of individual FCPA-related criminal cases (e.g. FCPA and money laundering charges), the number of declinations (with possible disgorgement) under the FCPA Corporate Enforcement Policy will increase. In 2018, there were 4 separate declinations, two of which included disgorgement. In 2019, I predict there will be 8 to 10 declinations under the FCPA Corporate Enforcement Policy (separate from declinations for other reasons, e.g. lack of evidence, statute of limitations issues).
Second, the U.K.’s Serious Fraud Office under the new leadership of Lisa Osofsky will play a larger role in bribery prosecutions, particularly with respect to individuals.
Third, the number of corporate monitors will continue to decline. In fact, for 2019, it is possible there may not be a monitor assigned in any case. Defense counsel are much more adept at remediation and enhancement at corporate compliance programs as a way to foreclose appointment of corporate monitors.
Fourth, DOJ will bring a new undercover case involving the use of an informant and undercover officers. The last undercover cases were the Baptiste case, which involved corruption in Haiti, and included Title III wiretaps and undercover recordings, and part of the PDVSA case, which involved a recorded informant. In 2019, we are likely to witness a new undercover case involving corruption in another separate investigation.
For 2019, we are still awaiting the resolution of several significant corporate cases (aside from Wal-Mart which will NOT be resolved in 2019). These include:
Goldman Sachs: The Goldman Sachs 1MDB case continues to dominate FCPA enforcement headlines. It is the next “big” case that will be closely followed. Malaysian prosecutors recently announced criminal charges against Goldman Sachs. DOJ’s investigation and handling of this matter will be closely scrutinized. If the case is resolved this year, it will likely not occur until late in 2019.
Ericsson: This case has been pending since 2013. Ericsson has continued to disclose updates about the investigation and its discovery of issues and potential code violations. Given its long history, this case will hopefully conclude sometime in 2019.
Microsoft: This enforcement action continues to live under the radar screen. We expected it to settle in the last two years but unfortunately it continues to lag. The focus of the case has been on Microsoft’s channel partners in Hungry, Italy, China and Romania, but little else is known about the case.
Fresenius: This case was predicted to end last year after Fresenius announced the reserve of $245 million in February 2018 for a possible settlement. This amount was increased by $86 million in October 2018. This case should be resolved in the first quarter of 2019.
The FCPA pipeline of case continues to grow. In 2018, the number of disclosures of new investigations exceeded 100 (more than 2017). Some of the significant new or ongoing investigations include: Airbus, Glencore Mining, General Electric, CHS, Inc., and Cognizant Technology. There are more for sure but these are just a sample of some of the ongoing investigations.