United States: Current FCPA Investigations

MTS

In January 2013, Minnesota-based MTS Systems Corporation stated that it fired several Korean employees after conducting an investigation into possible FCPA violations. The investigation was focused on gift giving, travel and accommodation practices in its Asian operations. MTS self-disclosed results of the internal investigation to the DOJ, the SEC, and the U.S. Air Force (pursuant to an agreement between the Air Force and MTS). MTS stated in the disclosure that the amount of money was small and would not be reported on future financial statements. MTS plead guilty in 2008 to lying about its exports. The company was notified in March 2011 by the U.S. Air Force that the company was banned from all federal contracting for failing to disclose the previous guilty plea. The ban was lifted in September 2011, but the Air Force required that MTS continue to make marked improvements in its ethics compliance program and to hire an independent monitor.

Goodyear Tire & Rubber Company

Goodyear Tire & Rubber Company reported in February 2013, that it has taken remedial measures following an internal investigation into possible FCPA violations. The internal investigation centered on an anonymous tip about improper payments in Kenya and Angola. The tip about problems in Kenya was relayed through the company's own ethics hotline. The tip concerning Angola surfaced via a separate report from an employee working in Angola. The company did not go into detail about what the remedial measures that were taken.

Bristol-Meyers Squibb

Bristol-Meyers Squibb announced in February that the FCPA investigation the SEC initiated seven years ago has been expanded. The investigation, which originally focused on operations in Germany, has increased to cover overseas sales and marketing practices in unnamed countries and regions. The original investigation was an inquiry into the activities of Bristol-Meyers Squibb German pharmaceutical subsidiaries and its employees and/or agents. The company is currently cooperating with authorities.

Cobalt International Energy, Inc.

The oil and gas firm Cobalt International Energy, Inc. announced in February 2013, that the SEC and the DOJ are continuing their investigation into alleged illegal activity between Angolan government officials and Nasaki Oil and Gas, one of Cobalt's partner's in Angola. Cobalt has stated that its own independent internal investigation yielded no signs of illegal conduct.

Cobalt has stated that it first learned of the activity between Nasaki and the government officials in 2010. Cobalt further stated that it was forced to enter into contracts with Angolan-based companies and that it had not worked in the past with Nasaki. Cobalt has decided to provide the SEC and the DOJ with information at the same time, to avoid redundancies. The investigation into the Angolan operations began in November 2011.

Microsoft Corp.

Microsoft Corp. announced on March 19, 2013, that the DOJ and the SEC are investigating a whistleblower complaint pertaining to alleged bribes paid by business partners to officials in China, Italy, and Romania. The investigations are still preliminary, and neither the DOJ nor the SEC have formally accused Microsoft of any violations.

Imaging-Sensing Systems

Minnesota-based Image-Sensing Systems announced on March 26, 2013, that authorities have begun investigating the company for possible FCPA and U.K. Bribery Act violations. The investigation developed out of a police investigation in Poland, where two employees of Image-Sensing's Poland unit were charged with criminal violations related to a government project in Poland. Image-Sensing has indicated in public filings that it is self-disclosing to both the DOJ and the SEC. Further, Image-Sensing has stated that the investigation has cost the company $1.5 million through March 22, 2013. Image-Sensing trades on the NASDAQ.

InBev

Anheuser-Busch InBev stated in March 2013, that the SEC is investigating its India joint venture for possible FCPA violations. The SEC is investigating the activities of certain agents and employees of InBev's India affiliates.

Harris Corporation

Florida-based Harris Corporation stated in May 2013, that it received a formal order of investigation from the SEC on April 23, 2013. The focus of the investigation is the company's Carefx subsidiary, located in China. Harris acquired the Chinese subsidiary in 2011, and became aware in 2012 that entertainment, travel, and other expenses tied to Carefx China may have been incurred or recorded improperly. The company previously conducted an internal investigation and self-disclosed to the DOJ and the SEC. Both government agencies are now conducting investigations of their own.

IBM

IBM stated in an SEC filing in May 2013, that the DOJ had opened a FCPA investigation into transactions in Argentina, Bangladesh, Poland, and Ukraine. In addition, the DOJ is requesting information regarding the company's global FCPA compliance program and its public sector business.

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