A federal district court judge in New York City today threw out the SEC’s civil FCPA enforcement action against a former Siemens executive accused of helping pay $100 million in bribes to officials in Argentina.
Judge Shira Scheindlin said Herbert Steffen, a German citizen and former chief executive officer of Siemens SA Argentina, did not have minimum contacts with the United States necessary to subject him to personal jurisdiction.
A copy of Judge Scheindlin’s order of dismissal can be viewed and downloaded here.
Steffen, 74, retired from Siemens nearly ten years ago, he said in an earlier filing, and has not been employed since.
In her ruling, Judge Scheindlin said: ‘Steffen’s lack of geographic ties to the United States, his poor proficiency in English and the forum’s diminished interest in adjudicating the matter all weigh against personal jurisdiction.’
‘He was never employed in the United States,’ his lawyers had 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.’
Siemens’ settlement in December 2008 with the DOJ and SEC for $800 million is still the biggest FCPA enforcement action of all time.
The SEC filed FCPA-related civil charges in late 2011 against Steffen and six other Siemens executives. They allegedly paid $100 million in bribes to top government officials in Argentina to win a $1 billion contract for national identity cards.
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 2011, 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 to be close to settling with the SEC. He’s a former member of the central executive committee of Siemens AG in Germany.
When the SEC filed the case in December 2011, Robert Khuzami, then head of the SEC’s enforcement division, said it was the largest civil enforcement action ever brought by the SEC against defendants accused of bribing foreign officials.
In her order Tuesday, Judge Scheindlin said, ‘The SEC’s interest in ensuring that this type of conduct does not go unpunished will not be furthered by continuing the suit against Steffen, in light of his age, the burden on him to defend this suit, and the previous adjudications.’