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A Different Kind of FCPA Settlement: What Corporate Defendants and “Victims” Can Learn From the Nokia-Ericsson Civil Resolution

The peril of FCPA punishments often is perceived as arising exclusively from government agencies like the DOJ and SEC, and other emerging enforcement agencies both domestic and international. So, when Swedish telecom giant Ericsson announced its $1 billion settlement in December 2019 with the DOJ and the SEC, it was a somewhat predictable resolution negotiated with, and payable to, the usual players. However, in a less noticed and more unusual development, in May 2021 Ericsson announced a $97 million direct settlement with competitor Nokia that arose from its billion-dollar FCPA resolution.

This important development represents an example of one of the unintended consequences of a settlement for companies seeking finality when resolving an FCPA case with the government. General counsels and compliance officers should include this risk among the “offensive” options to consider upon settling FCPA allegations. For internal audiences who are desensitized to the message that they may have to pay millions of dollars to enforcement agencies, perhaps the special sting of having to pay millions to their direct competitor may garner new attention.

In this article, Ephraim “Fry” Wernick, Palmina Fava, Michael Ward, Christopher James and John Greil examine the relative rarity of competitor-victim claims that follow from an FCPA resolution, and the possibility of an upward trend on the heels of recent support for victim claims and restitution from the DOJ and federal courts.

Read the full article here.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.