Close X
Attorney Spotlight

What colorful method does Claire Miley use to keep up with the latest healthcare regulations as they relate to proposed transactions? Find out more>

Search

Close X

Experience

Search our Experience

Experience Spotlight

On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

CLARCOR
Close X

Thought Leadership

Enter your search terms in the relevant box(es) below to search for specific Thought Leadership.
To see a recent listing of Thought Leadership, click the blue Search button below.

Thought Leadership Spotlight

Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

Read More >

Global FCPA Resolution: VimpelCom to Pay $795M to U.S. and Dutch Authorities

Firm Publication

Publications

February 22, 2016

On February 19, 2016, the U.S. Department of Justice ("DOJ"), the U.S. Securities and Exchange Commission ("SEC") and Dutch regulators announced a global resolution requiring telecommunications provider, VimpelCom Limited ("VimpelCom" or the "Company"), to pay more than $795 million to resolve allegations that it violated the U.S. Foreign Corrupt Practices Act ("FCPA") by making improper payments to win business in Uzbekistan. VimpelCom is to pay $397.5 million to Dutch prosecutors, $230.1 million in criminal penalties to the DOJ and $167.5 million in disgorgement to the SEC. The Company entered into a Deferred Prosecution Agreement with DOJ and is required to retain an independent compliance monitor for a period of three years. VimpelCom's wholly-owned Uzbek subsidiary, Unitel LLC ("Unitel"), pleaded guilty to one count of conspiracy to violate the anti-bribery provisions of the FCPA.

This resolution ranks as the sixth largest FCPA enforcement action ever recorded and the first to make the top ten since the Alstom resolution in December 2014. The enforcement action is being touted by U.S. Assistant Attorney General Leslie Caldwell as "one of the most significant coordinated international and multi-agency resolutions in the history of the FCPA."

Between 2006 and 2012, VimpelCom and Unitel allegedly made more than $114 million in improper payments – which were concealed as equity transactions, reseller transactions and charitable contributions – to a government official in Uzbekistan. Although the specific recipient of the bribes remains unconfirmed, U.S. and Dutch officials primarily focused on payments to a company tied to the daughter of the Uzbek president. The SEC claims that the payments can be tied to $2.5 billion in revenue for VimpelCom.

During VimpelCom's internal investigation by outside counsel, it was reported that Company executives concealed material information. The DOJ said: "[r]ather than implement and enforce a strong anti-corruption ethic, certain VimpelCom executives sought ways to give the company plausible deniability of illegality while knowingly proceeding with corrupt business transactions." Nevertheless, the Company still received significant cooperation credit: the fine reflected a 45% reduction from the bottom of the U.S. Sentencing Guidelines Fine Range. The reduction resulted from VimpelCom's "prompt acknowledgement of wrongdoing after being informed of the DOJ's investigation, for their willingness to promptly resolve their criminal liability on an expedited basis, and for their extensive cooperation with the DOJ's investigation." However, the DOJ disclaimed that the company would have received more significant credit had they voluntarily self-disclosed the misconduct following the results of their internal investigation.

Separately, the United States is still seeking $850 million in forfeiture of funds from bank and investment accounts held in in Belgium, Luxembourg, Ireland and Switzerland. The United States says the monies used to bribe the Uzbek government officials were funneled through the United States and laundered before being deposited into banking institutions in the above-listed countries. If the $850 million sought in forfeiture is recovered, the monetary penalties would total $1.64 billion.

There are several takeaways from the VimpelCom case, including:

  1. If we thought the days of high dollar enforcement actions were over, we may have been wrong. This $795 million resolution places it as the sixth largest FCPA enforcement action ever.
  2. In September 2015, the DOJ made clear its intent to pursue charges against individuals for FCPA violations through the issuance of the Yates Memorandum. Although no individuals have been charged to date, the DOJ's press release specifically noted that VimpelCom would continue to cooperate with government's ongoing investigation of individuals.
  3. The DOJ continues to emphasize the importance of timely voluntary disclosure and cooperation. While, VimpelCom received significant credit for their cooperation once the investigation commenced, the DOJ expressly noted the Company's failure to timely disclose the misconduct uncovered during the Company's internal investigation.
  4. VimpelCom arguably qualifies as a state-owned entity under the FCPA. The company is owned in part by private Russian investors and, in part, by Norwegian state-controlled telecommunications provider Telenor ASA ("Telenor"). In an earnings release, the Company said that Telenor put its 33% holding in VimpelCom up for sale. Telenor's chairman resigned in October 2015 because of the investigation. It is unclear whether or how much Telenor knew about the improper payments in Uzbekistan.
  5. Finally, this enforcement showcases cross-border cooperation. In this instance, the efforts uniquely led to simultaneous resolutions with the United States and the Netherlands. Enforcement agencies in at least eight other countries – Sweden, Switzerland, Latvia, Belgium, France, Ireland, Luxembourg and the United Kingdom – provided assistance.

For more information about this enforcement action or the FCPA generally, please contact a member of the Bass, Berry & Sims FCPA anti-corruption group.

We would like to thank Jean-Pierre Denour, a Bass, Berry & Sims law clerk based in our Washington, D.C. office, for his assistance in drafting this alert.

Related Professionals

Related Services

Notice

Visiting, or interacting with, this website does not constitute an attorney-client relationship. Although we are always interested in hearing from visitors to our website, we cannot accept representation on a new matter from either existing clients or new clients until we know that we do not have a conflict of interest that would prevent us from doing so. Therefore, please do not send us any information about any new matter that may involve a potential legal representation until we have confirmed that a conflict of interest does not exist and we have expressly agreed in writing to the representation. Until there is such an agreement, we will not be deemed to have given you any advice, any information you send may not be deemed privileged and confidential, and we may be able to represent adverse parties.