A German citizen who once ran Siemens’ subsidiary in Argentina said in a court filing last week that the U.S. Securities and Exchange Commission has no jurisdiction over him and its civil complaint should be dismissed.
The SEC filed FCPA-related charges last year against Herbert Steffen and five other Siemens executives arising out of alleged bribery of government officials in Argentina.
In December last year, eight former Siemens employees and agents were also charged in a U.S. criminal indictment.
The civil and criminal defendants are all non-U.S. citizens living outside the United States. The criminal case has been on hold pending their extraditions.
In his motion to dismiss the SEC’s civil complaint, Steffen said he lives in Germany and spent his career at Siemens working in Germany, Brazil, and Argentina.
‘He was never employed in the United States,’ his lawyers have argued, ‘and never travelled to the United States on business for Siemens during the entire period alleged in the complaint. The complaint alleges he had managerial positions in Siemens’ Argentina business from 1983 through 1989 and again in 1991. There are no allegations of any improprieties during the period he had such responsibilities.’
Last year, Bernd Regendantz settled with the SEC. The former Siemens Argentina executive agreed to pay a civil penalty of $40,000. He wasn’t indicted in the criminal case.
Another defendant, Ariel Sharef, was reported earlier this year to be close to settling with the SEC. He’s a former member of the central executive committee of Siemens AG in Germany.
In support of his motion to dismiss the SEC’s complaint against him, Steffen said last week that:
[T]he SEC asks this Court to assert personal jurisdiction over a defendant: (1) who is a German citizen and resident; (2) who conducted no business in the United States; (3) whose only alleged U.S. “contact” resulted from the unilateral actions of another party; (4) whose allegedly improper conduct occurred entirely outside the United States; and (5) whose conduct was not aimed at and caused no injury in the United States. This request should be rejected. Because the SEC has not met its burden to plead legally sufficient allegations establishing personal jurisdiction over Mr. Steffen, its complaint must be dismissed.
He also said the SEC ‘has failed to explain how its action . . . is not barred by the [FCPA’s five-year] statute of limitations, 28 U.S.C. § 2462.’
Steffen, 74, retired from Siemens nearly ten years ago, he said in an earlier filing, and has not been employed since.
Siemens’ settlement in December 2008 with the DOJ and SEC for $800 million is still the biggest FCPA enforcement action of all time.
Judge Shira A. Scheindlin is presiding over U.S. Securities and Exchange Commission v. Sharef et al, U.S. District Court for the Southern District of New York (Foley Square) Civil Docket #: 1:11-cv-09073-SAS.