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Episode 258 — Deep Dive in the ABB FCPA Case

The Justice Department’s new Corporate Enforcement Policy and the heightened enforcement and compliance expectations were put to the test in its announcement of a $315 million settlement of bribery charges with ABB, a three-time loser in foreign bribery enforcement.  However you interpret this case, the ABB enforcement action demonstrates yet again the vitality of DOJ’s commitment to FCPA enforcement, and that the industry can expect additional enforcement actions, perhaps another before years end that may fall within the “blockbuster” category.

Two ABB subsidiaries, one in South Africa and the other in Switzerland, each separately agreed to enter a guilty plea to FCPA conspiracy for violation of the bribery provisions.  ABB’s parent agreed to enter into a three-year deferred prosecution agreement (“DPA”) for the same conduct. 

ABB’s settlement resolved SEC charges for $75 million (although the SEC had not yet released its settlement with ABB) and several foreign country prosecutions, including South Africa and Switzerland, and an expected resolution with German authorities. DOJ agreed to credit up to half of the $315 million for ABB’s payment of penalties to South African authorities. The South African authorities simultaneously announced a settlement with ABB under which ABB would pay $142 million to the South African government.

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