The Q2 2017 report on global investigations and compliance noted a quiet enforcement period under the FCPA, highlighted by the settlements of two Magyar Telekom executives and the receipt of declination letters by entities like Linde North America and CDM Smith. DOJ officials emphasized the importance of international cooperation, voluntary reporting, and a transparent decision-making process regarding FCPA enforcement. Significant personnel changes included the departure of Kara Novaco Brockmeyer from the SEC and the impact of the Supreme Court's ruling on disgorgement under the FCPA, which may affect investigation timelines.

1. GLOBAL INVESTIGATIONS AND COMPLIANCE
FCPA Q2 2017 -
QUARTERLY REPORT
by Ellen Zimiles, John Loesch, and Jay Perlman
From an enforcement perspective, the second quarter of 2017 was relatively quiet. Two
Magyar Telekom executives settled cases that the Securities and Exchange Commission
(“SEC”) had filed against them, and two entities received declination letters from the
Department of Justice (“DOJ”).
Additionally, statements by DOJ officials indicated that enforcement of the Foreign
Corrupt Practices Act (“FCPA”) and cooperation with international regulators and
prosecutors continue to be important priorities, despite a change in administration and
leadership at the DOJ. DOJ officials also noted the importance of the FCPA Pilot Program
in its efforts to root out instances of corporate bribery and corruption.
Finally, in Kokesh v. SEC the U.S. Supreme Court held that disgorgement is subject to
a five-year statute of limitations – which has potential to impact how long SEC FCPA
investigations take.1
I. ENFORCEMENT ACTIVITY IN Q2 2017
A. Magyar Telekom
On April 24, two former executives at Hungary-based telecommunications
company Magyar Telekom agreed to settle previously filed SEC charges
alleging they violated the FCPA. Elek Straub, Magyar’s former CEO, agreed
to pay a $250,000 penalty, and former Chief Strategy Officer Andras Balogh
agreed to pay a $150,000 penalty. Both also agreed to a five-year bar from
serving as an officer or director of any SEC-registered public company.2
1. SEC. Kokesh v. Securities and Exchange Commission, 581 U.S. No. 16-529 (2007).
2. SEC. “U.S. Securities and Exchange Commission, Telecom Executives Agree to Pay Penalties for FCPA Violations,”
press release, April 24, 2017.

2. 2
B. Linde North America Inc. and Linde Gas North
America LLC
On June 16, two American units of Germany’s Linde
Group, Linde North America Inc. and Linde Gas North
America LLC (“Linde”), received declination letters under
the FCPA Pilot Program, pursuant to which they agreed
to disgorge approximately $11.2 million.
Between November 2006 and December 2009, Linde
made corrupt payments through a subsidiary, Spectra
Gases, Inc. (“Spectra”), to high-level officials at National
High Technology Center (“NHTC”), a 100-percent-state-
owned-andcontrolled entity of the Republic of Georgia.
When Linde discovered the misconduct, it immediately
began an internal investigation and disclosed the
offenses to the DOJ.
The DOJ issued the declination based on Linde self-
reporting the misconduct, fully cooperating with the
U.S. government, taking remedial actions to address the
conduct, and agreeing to disgorge the corrupt profits
Spectra received. Linde disgorged $1.4 million in profits
plus $6.4 million in profits earned by Spectra, and
forfeited $3.4 million in payments owed to NHTC officials
and companies.3
C. CDM Smith, Inc.
On June 29, CDM Smith, Inc. received a declination
letter pursuant to which they agreed to disgorge
approximately $4 million in profits.
According to the allegations, CDM Smith’s India division
and its India subsidiary paid bribes to officials in the
National Highways Authority of India in exchange
for contracts with the Authority. Additionally, these
same entities also paid a $25,000 bribe to officials
in the Indian state of Goa to obtain a water project
contract. DOJ cited CDM Smith’s timely and voluntary
self-disclosure, its thorough and comprehensive
investigation and full cooperation, enhancement of its
compliance program, and full remediation, including
termination of the executives and employees involved in
the misconduct.4
II. WHAT THE ENFORCERS ARE SAYING
Continued enforcement of the FCPA, international
cooperation, and voluntary reporting were topics of
conversation as leaders of the DOJ spoke at conferences
this quarter.
Acting Principal Deputy Assistant Attorney General Trevor
N. McFadden spoke at three conferences this quarter, two
in the U.S. and one in Brazil. At the U.S. conferences, the
Anti-Corruption, Export Controls & Sanctions Compliance
Summit and the American Conference Institute’s (“ACI”)
Conference on FCPA, McFadden stressed the achievements
of the FCPA Unit and the importance of effective
compliance with the FCPA. He also noted the importance of
tone at the top as part of an effective compliance program,
stating, “The example is set at the top and management
must ensure that an appropriate system is in place to ensure
corporate expectations are followed.”5
He also noted that
the FCPA Pilot Program is creating increased transparency
into DOJ’s decision-making process on whether or not to
pursue an enforcement action. McFadden stated that this
transparency will create trust between DOJ and companies.
He also highlighted the importance of international
cooperation, saying, “In so many of the cases we handle,
and nearly all of the white-collar cases, cooperation with
our foreign partners has become a hallmark of our work.”6
He echoed these themes at the ACI’s 7th Brazil Summit on
Anti-Corruption. He emphasized that “the U.S. Department
of Justice remains committed to enforcing the FCPA and
to prosecuting fraud and corruption more generally.”7
He
spoke at length about the importance of international
cooperation and the rising trend of multi- jurisdictional
prosecutions of criminal conduct. He said, “International
cooperation is a two-way street, meaning that just as we
receive significant assistance from our foreign partners in
our investigations and prosecutions, so too do we provide
significant assistance to them.”8
He cited the Rolls-Royce
case as an example of a multi-jurisdictional prosecution. He
concluded his remarks by mentioning the risks of corruption
and re-emphasizing that the Criminal Division will “increase
our commitment to international cooperation.”9
3. Department of Justice Declination Letter to Linde North America Inc., Linde Gas North America LLC, June 16, 2017.
4. Department of Justice. Declination Letter to CDM Smith, Inc., June 21, 2017.
5. Department of Justice. “Acting Principal Deputy Assistant Attorney General Trevor N. McFadden Speaks at Anti-Corruption, Export Controls & Sanctions 10th Compliance
Summit,” April 18, 2017.
6. Department of Justice. “Acting Principal Deputy Assistant Attorney General Trevor N. McFadden of the Justice Department’s Criminal Division Speaks at ACI’s 19th Annual
Conference on FCPA,” April 20, 2017.
7. Department of Justice, “Acting Principal Deputy Assistant Attorney General Trevor N. McFadden Speaks at ACI’s 7th Brazil Summit on Anti-Corruption,” May 24, 2017.
8. Ibid.
9. Ibid.

3. 3
At the Ethics and Compliance Initiative and Annual
Conference, Attorney General Jeff Sessions spoke about
the DOJ’s continued commitment to enforcing all laws.
He stated that while there has been an increased focus on
violent crimes, immigration and drugs, the DOJ remains
focused on prosecuting white-collar crime. He said, “We
will continue to strongly enforce the FCPA and other
anti-corruption laws.”10
He emphasized that the DOJ will
hold not only companies and corporations accountable,
but also individuals. He said that when the DOJ makes
decisions regarding prosecutions, they consider the state
of the compliance program, whether the companies
or individuals cooperate and self-report, and whether
they work to remediate the program. He thanked the
compliance staff present at the conference and noted
that they help to prevent wrongdoing and build a strong
culture of compliance. He said that compliance depends
on “people and companies choosing of their own accord
to obey the law and do the right thing. Making this happen
is a larger task — one that is entrusted to all of us.”11
III. NOTABLE DEPARTURES
Chief of the SEC Enforcement Division’s FCPA Unit, Kara
Novaco Brockmeyer, left the agency in May. Since 2011,
she led a national unit of 38 attorneys, accountants,
and other specialists focusing on violations of the
anti-bribery and accounting provisions of the federal
securities laws. She also founded and served as the
co-head of the Enforcement Division’s Cross-Border
Working Group. Under her supervision, the SEC brought
72 FCPA enforcement actions addressing a wide range
of misconduct resulting in judgments and orders totaling
more than $2 billion in disgorgement, prejudgment
interest, and penalties. She joined the SEC in 2000,
following several years in private practice. Regarding her
departure, she said, “It has been an honor and a privilege
to work with incredibly talented and dedicated staff in the
FCPA Unit and throughout the Division of Enforcement
and the SEC.”12
Charles Cain, deputy chief of the FCPA
Unit, is now serving as Acting Chief of the Unit.
Hui Chen, Compliance Counsel for the DOJ, left the DOJ in
June, after almost two years of service.13
She joined the DOJ
in November 2015 and provided guidance to Fraud Section
prosecutors regarding the existence and effectiveness
of compliance programs and whether companies took
meaningful remedial actions. The DOJ is currently seeking a
new Compliance Counsel to replace her.
IV. LITIGATION DEVELOPMENTS
On June 5, 2017, the U.S. Supreme Court, in Kokesh v.
SEC, ruled that Disgorgement in SEC cases is a “civil
fine, penalty, or forfeiture, pecuniary or otherwise”1
under 28 USC § 2462 and is thus subject to a five-year
statute of limitations. Though too early to tell, it will be
interesting to see how Kokesh affects the speed of SEC
FCPA investigations.
Special thanks to Alex Shea and Andrew Lind, who contributed
to this article.
10. Department of Justice. “Attorney General Jeff Sessions Delivers Remarks at Ethics and Compliance Initiative Annual Conference,” April 24, 2017.
11. Ibid.
12. SEC. “Kara Novaco Brockmeyer, Chief of FCPA Unit to Leave SEC After 17 Years of Service,” press release, April 4, 2017.
13. Chen, Hui. “Mission Matters,” LinkedIn, June 25, 2017.

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CONTACTS
ELLEN ZIMILES
Financial Services Advisory and Compliance Segment Leader
212.554.2602
ellen.zimiles@navigant.com
JOHN LOESCH
Director
Global Investigations and Compliance
202.973.3235
john.loesch@navigant.com
JAY PERLMAN
Director
Global Investigations and Compliance
202.973.3220
jay.perlman@navigant.com
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