SEC Accepting Whistleblower Award Claims for FCPA Bribery Cases

FCPA Whistleblower

On January 31, the U.S. Securities and Exchange Commission (SEC) posted Notice of Covered Actions (NoCAs) for two recent Foreign Corrupt Practices Act (FCPA) enforcement actions. The actions, taken against ABB Ltd, a global electrification and automation technology company, and Honeywell International Inc., a U.S.-based global manufacturer of aerospace, building technologies, and automation products, stem from charges of bribery schemes.

The NoCAs signal that the SEC is now accepting whistleblower award claims for the cases. Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to monetary awards of 10-30% of the sanctions collected by the SEC in the case.

The SEC charged ABB with engaging in a bribery scheme in South Africa. ABB agreed to pay $75 million to settle the charges.

According to the SEC, “from 2015 through 2017, ABB executives in Switzerland and South Africa colluded with a high-ranking government official at Eskom, an electricity provider owned by the South African government, to funnel bribes to the official through complicit third-party service providers with whom the government official had close personal relationships.” The SEC alleges that ABB paid a $37 million bribe in order to obtain a $160 million contract.

“Notwithstanding prior FCPA-related violations and known corruption risks throughout its operations, ABB lacked sufficient controls to detect or deter this egregious bribery scheme,” said Charles Cain, Chief of the SEC’s FCPA Unit.

In a parallel case, the U.S. Department of Justice (DOJ) fined ABB $315 million to settle criminal charges. Under the SEC Whistleblower Program’s related action provisions, when a whistleblower’s information is used by another agency in a related action they are entitled to an award of 10-30% of the sanctions collected in that action.

The SEC charged Honeywell with engaging in bribery schemes in Brazil and Algeria. The company agreed to pay more than $81 million to settle the SEC’s charges and to pay more than $78 million to settle criminal charges brought by the DOJ in a parallel case.

According to the SEC, “in 2010, Honeywell offered at least $4 million in bribes to a high-ranking Brazilian government official in connection with the bidding process at [Brazilian state-owned entity] Petrobras,” and “in 2011, employees and agents of Honeywell’s Belgian subsidiary paid more than $75,000 in bribes to an Algerian government official to obtain and retain business with the Algerian state-owned entity Sonatrach.”

“For years, Honeywell neglected to implement sufficient internal accounting controls to mitigate against known corruption risks in countries like Brazil and Algeria,” said Cain. “This failure created an environment in which Honeywell employees and agents could and did facilitate bribes.”

Both enforcement actions were filed in the first few months of Fiscal Year 2023. According to a recent report by FCPA Clearinghouse, Fiscal Year 2022 was another down year for FCPA enforcement with only 25 FCPA-related enforcement actions filed.

Further Reading:

SEC Notice of Covered Actions

ABB Settles SEC Charges That It Engaged in Bribery Scheme in South Africa

SEC Charges Honeywell with Bribery Schemes in Algeria and Brazil

What is the Foreign Corrupt Practices Act

More FCPA Whistleblower News on WNN

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