In the first coordinated enforcement action by the DOJ and French authorities in an overseas corruption case, a Paris-based bank agreed Monday to settle charges that it paid over $90 million in bribes to officials in Libya during the Qaddafi regime.
In the United States, Société Générale S.A. (or SocGen) entered into a deferred prosecution with the DOJ.
The bank’s subsidiary — SGA Société Générale Acceptance N.V. — will plead guilty Tuesday (June 5) to an FCPA conspiracy charge in federal court in New York, the DOJ said.
As part of the enforcement action, SocGen also reached a settlement with the Parquet National Financier (PNF) in Paris for the bribes in Libya.
It’s the first “coordinated resolution with French authorities in a foreign bribery case,” the DOJ said.
SocGen will pay the PNF $292.8 million — “equal to 50 percent of the total criminal penalty otherwise payable to the United States” — and receive a credit against the U.S. fine.
The French bank also agreed Monday to pay $475 million in criminal penalties to the DOJ and disgorgement to the Commodity Futures Trading Commission for rigging the LIBOR rate. The DOJ said the criminal penalty is $275 million.
From 2004 and 2009, SocGen paid bribes through a Libyan “broker.” In return, the bank landed 14 investments from Libyan state-owned financial institutions.
The total amount paid to the intermediary was over $90 million, according to SocGen’s admissions.
Muammar Gaddafi ran Libya from 1969 until 2011, when he was killed by Libyan rebels.
“For each transaction, Société Générale paid the Libyan broker a commission of between one and a half and three percent of the nominal amount of the investments made by the Libyan state institutions,” the DOJ said.
SocGen received 13 investments and one restructuring from Libyan state institutions worth $3.66 billion.
The bank earned profits of $523 million from the Libya business.
The DOJ said Société Générale entered into a deferred prosecution agreement to resolve a criminal information (similar to an indictment). The information charged the bank with one count of conspiracy to violate the anti-bribery provisions of the FCPA and one count of transmitting false commodities reports.
(Under most deferred prosecution agreements, companies aren’t required to plead guilty. The pending charges are dropped when the DPA expires, usually after two or three years, if the defendant has met its obligations set out in the DPA.)
The subsidiary, SGA Société Générale Acceptance N.V., will plead guilty in federal court to a one-count criminal information charging a conspiracy to violate the anti-bribery provisions of the FCPA.
SocGen’s deferred prosecution agreement and the subsidiary’s plea agreement are subject to court approval.
The enforcement action is the fifth biggest FCPA case ever.
In 2016, fund manager Och-Ziff settled allegations that during the Qaddafi regime it bribed officials at the Libyan Investment Authority or LIA, Libya’s sovereign wealth fund. Och-Ziff paid $412 million to settle the FCPA offenses in Libya and several other African countries.
Last week, fund manager Legg Mason, Inc. said it reserved $67 million for an expected settlement of an FCPA investigation into a unit that managed money for the Libyan government during the Qaddafi regime.
The DOJ said Monday it charged SocGen and the subsidiary “in part due to Société Générale’s failure to voluntarily self-disclose” the FCPA offenses.
The DOJ also cited the “seriousness” of the conduct and high value of the bribes paid to foreign officials.
A monitor wasn’t appointed, the DOJ said, because of SocGen’s “substantial, though not full, cooperation,” and its “significant remediation.”
The bank will also be subject to “ongoing monitoring” by France’s L’Agence Française Anticorruption, the DOJ said.
The DOJ said it received “significant cooperation” in the case from the Parquet National Financier, the UK Serious Fraud Office, the Federal Office of Justice in Switzerland, and the Office of the Attorney General in Switzerland.
The FCPA Blog | June 4, 2018