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$175,000 Fine for Failure to Disclose FCPA Conviction

Tuesday, September 27, 2016
Sandler, Travis & Rosenberg Trade Report

A recent announcement from the Federal Communications Commission indicates that bribery of foreign officials to obtain or retain business can have ramifications beyond the penalties that may be assessed by the Department of Justice and the Securities and Exchange Commission.

According to the FCC, two companies have agreed to pay $175,000 to resolve an investigation into whether they failed to disclose prior criminal convictions for FCPA violations and obstruction of justice. Both will also adopt a compliance plan to prevent future failures to disclose felonies or other material factual information in FCC license applications. This plan will require the companies to develop and implement procedures to monitor compliance, designate a senior manager as a compliance officer, develop a comprehensive training program, and report to the FCC’s Enforcement Bureau regularly on compliance.

FCC rules require wireless license holders to disclose any felony convictions in their license applications, but these companies and some of their subsidiaries failed to do so on applications filed between 2007 and mid-2015. In 2008 these companies’ parent corporation paid $450 million in criminal fines and $350 million in disgorgement for FCPA violations, and in 2007 one of these companies paid $2.5 million in fines and restitution after pleading guilty to a charge of obstruction of justice in connection with a civil matter.

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