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  • Bio-Rad Appeals $11 Million Verdict Awarded to FCPA Whistleblower

    Following a $55 million civil and criminal FCPA settlement by Bio-Rad, a life science research and diagnostics company, in November 2014, the company’s former General Counsel and Secretary, Sanford Wadler, filed a civil complaint against Bio-Rad and executive officers and board members alleging that he was fired for blowing the whistle on FCPA issues. In February 2017 a jury awarded Wadler a total of $11 million in punitive and compensatory damages (including double back-pay under Dodd-Frank).

    Bio-Rad recently appealed that verdict to the Ninth Circuit on the grounds that the trial court should have directed the verdict in favor of Bio-Rad because, it argues, the alleged FCPA violations were the result of Wadler’s lack of due diligence, because Wadler did not first consult the company’s compliance officers and FCPA lawyers before reporting, and because his allegations were discredited by trial witnesses. Bio-Rad also claims that the trial court wrongly excluded certain impeachment testimony, and that Wadley did not qualify as a “whistleblower” under Dodd-Frank in light of his internal reporting. 

    FCPA Enforcement Action Whistleblower FCPA Bio-Rad

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  • Halliburton Agrees to Settle FCPA Claim for $29 Million in Disgorgement and Penalties

    Halliburton Company recently settled allegations that the company improperly steered business to the friend of an Angolan official in exchange for that official awarding various oil contracts to the company. In total, Halliburton agreed to pay the SEC $29.2 million, comprising $14 million in disgorgement, $1.2 million in prejudgment interest, and a $14 million penalty. Halliburton’s former vice president also agreed to pay the SEC a $75,000 penalty related to these violations and other accounting irregularities.  

    This is the most recent settlement in a series of FCPA enforcement actions focusing on Halliburton’s procurement processes and operations in various countries. Former Halliburton subsidiary KBR settled similar FCPA allegations in 2009 related to alleged bribes paid to Nigerian officials to procure contracts in that country.    

    This settlement also highlights the role of whistleblowers in driving FCPA and other enforcement actions. A Halliburton whistleblower first alerted the company to potential FCPA issues in 2010, which resulted in the launching of an investigation into the allegations.

    SEC FCPA Enforcement Action Angola Disgorgement Bribery Nigeria Whistleblower

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  • Fired Bio-Rad General Counsel Wins $10.9 Million in FCPA Whistleblower-Retaliation Case

    On February 6, 2017, a federal jury in San Francisco awarded the former general counsel of Bio-Rad Laboratories, Inc. $10.9 million in a landmark FCPA whistleblower-retaliation case brought under the Sarbanes-Oxley Act (SOX), the Dodd-Frank Act, and California state law.  After three hours of deliberation, the jury found that Sanford Wadler, Bio-Rad’s general counsel of nearly 25 years, was fired for reporting suspected FCPA violations to Bio-Rad’s audit committee in February 2013, a protected activity under SOX’s anti-retaliation provisions.  Although Wadler did not report his concerns to the SEC, the court held in 2015 that internal whistleblowing under SOX was also protected by the Dodd-Frank Act’s anti-retaliation provisions, opening the door to Dodd-Frank’s double back-pay remedy.  Bio-Rad’s last-minute motion to block purported attorney-client privileged information from trial –“virtually all of the evidence and testimony Plaintiff might rely upon to prove his case” – was denied by the court in December 2016.

    The jury ultimately awarded Wadler $2.96 million in back-pay – to be doubled under Dodd-Frank – plus $5 million in punitive damages.  As detailed in a previous FCPA Scorecard post, Bio-Rad paid $55 million in November 2014 to settle DOJ and SEC allegations that the Company violated the FCPA in Russia, Thailand, and Vietnam.  Wadler’s report to the audit committee had involved separate allegations that the Company violated the FCPA in China.

    DOJ SEC Whistleblower Bio-Rad SOX Dodd-Frank

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  • Sanofi Discloses Investigation into Potential FCPA Violations

    French pharmaceutical company Sanofi S.A. has disclosed that it is investigating whether certain payments made by company employees from 2007 to 2012 in the Middle East and Africa to healthcare professionals violated the FCPA. Sanofi reportedly launched the investigation after receiving anonymous whistleblower allegations, including allegations that company employees made payments to doctors for prescribing Sanofi-manufactured pharmaceuticals. According to news reports, Sanofi has self-reported the allegations to the U.S. Department of Justice and the Securities and Exchange Commission. Sanofi’s disclosure appears to continue the trend of investigations and potential enforcement actions in the pharmaceutical industry concerning payments related to prescriptions, as well as the trend of companies self-disclosing whistleblower allegations.

    Whistleblower Pharmaceutical

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  • GlaxoSmithKline Ordered to Pay Almost $490 Million By Chinese Court For Alleged Bribery

    On September 19, according to media reports, a Chinese court ordered the Chinese subsidiary of GlaxoSmithKline, the UK-based pharmaceutical company, to pay approximately $487 million related to alleged bribery of hospitals and doctors.  Five of Glaxo’s managers were also convicted after entering guilty pleas, and Glaxo’s former country manager was ordered to be deported.  Glaxo apologized for the conduct in a statement.  Glaxo’s Chinese subsidiary was alleged to have bribed hospitals and their doctors to boost prescriptions of Glaxo products, including through payment of large travel and entertainment expenses and other fees, leading to over $150 million in additional revenue. The Glaxo case involves many of the key areas currently affecting anti-corruption practitioners and compliance personnel.  For example, allegations were first raised by a whistleblower in 2013, and investigations regarding bribery of foreign state-owned hospitals or their doctors have been rising in the past few years.  Here, while the full facts are not yet clear, Glaxo has stated that only commercial (business to business) bribery was at issue, characterizing the conduct at issue as “offer[ing] money or property to non-government personnel in order to obtain improper commercial gains, and . . . bribing non-government personnel.”

    China Whistleblower Pharmaceutical

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