Petrobras’s $1.78 billion FCPA resolution last week included disgorgement of $933.5 million, the biggest ever ordered in an FCPA enforcement action.
The SEC allowed Petrobras to credit against the disgorgement the money it had already paid into a settlement fund for U.S. shareholder litigation.
If for some reason Petrobras hasn’t disgorged that amount within a year through payments to the U.S. class action fund or otherwise, then Petrobras must pay the money directly to the SEC.
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Disgorgement, according to Contributing Editor Marc Alain Bohn, is a remedy authorized by the Securities Exchange Act of 1934 that’s “used to deprive wrong-doers of their ill-gotten gains and deter violations of federal securities law.”
Disgorgement first appeared in an FCPA enforcement action in 2004 when ABB Ltd disgorged $5.9 million to resolve books and records and internal controls offenses.
Since then the SEC has used disgorgement in most of its FCPA-related enforcement actions.
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Here are the current top ten FCPA-related corporate disgorgements. Amounts also include pre-judgment interest:
1. Petrobras $933.5 million in 2018
2. Telia $457 million in 2017
3. VimpelCom $375 million in 2016
4. Siemens $350 million in 2008
5. Teva $236 million in 2016
6. Och-Ziff $199 million in 2016
7. KBR $177 million in 2009
8. Alcoa $161 million in 2014
9. Total S.A. $153 million in 2013
10. JPMorgan Chase $130.5 million in 2016
Knocked off the top ten disgorgement list is Snamprogetti, which disgorged $125 million in 2010.
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For comparison, here’s our current list of the top ten FCPA enforcement actions.
Richard L. Cassin is the publisher and editor of the FCPA Blog.