Ongoing FCPA Litigation

Siemens

On January 17, 2013, Meng-Lin Liu filed a whistleblower retaliation complaint against Seimens, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. Meng-Lin Liu was formerly a compliance officer for Siemens. He alleged that it was Siemens's company policy to circumvent protocols and internal controls required by the FCPA. His complaint alleged that he uncovered serious "red flags" hinting to high risks of corruption in the sale of medical equipment in China and North Korea. He states that Siemens submitted intentionally inflated bids for the medical equipment to public hospitals. He also alleged that he was fired shortly following these disclosures, after the company ignored the high probability of bribery occurring through these transactions. Meng-Lin Liu continued to complain to executives following the firing and subsequently filed a whistleblower complaint with the SEC in 2011.

On February 19, 2013, a federal district court judge in New York City threw out the SEC's civil FCPA enforcement action against former Siemens executive Herbert Steffen, citing a lack of "minimum contacts" required for personal jurisdiction. Honorable Judge Shira Scheindlin cited a lack of geographic ties to the U.S. and poor proficiency in English as reasons for declining personal jurisdiction. The SEC filed charges in 2011 against Steffen, a German citizen, as well as six other Siemens executives. The SEC stated that the executives allegedly paid over $100 million in bribes to government officials in Argentina in order to procure a $1 billion contract for national identity cards. Also, in December 2012, eight former Siemens employees and agents were charged in a U.S. criminal indictment.

On April 16, 2013, a former officer and board member of Siemens AG, Uriel Sharef, settled civil FCPA charges with the SEC. He agreed to a $275,000 civil penalty and was enjoined from further violating the provisions of the FCPA.

Magyar Telekom

On February 8, 2013, a federal district court in New York City denied a motion to dismiss a civil FCPA enforcement action against executives of Magyar Telekom Plc. In December 2011, the SEC brought an action for FCPA violations against Elek Straub, Andras Balogh, and Tamas Morvai. All three defendants are Hungarian citizens and currently reside in Hungary. The suit states that the executives violated the books and records and internal controls provisions of the FCPA. In addition, it states that they knowingly...