Welcome to Compliance Hot Spots, our weekly briefing on compliance, enforcement and government affairs. We've got some thoughts below as we approach December, the 10-year anniversary of the Justice Department's landmark FCPA settlement with Siemens. Meanwhile: Amazon and Tesla both are facing new probes, and we've got a report on an ex-O'Melveny partner up for a key post at the U.S. Treasury Department. Scroll down for the latest moves and appointments.

Thanks for reading my newsletter—and please do send feedback. I appreciate hearing from you about what's on your plate—observations, trends, new clients. I'm at [email protected] and 202-828-0315, or follow me on Twitter @cryanbarber.

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Happy 10-Year Anniversary to the Siemens FCPA Settlement

A decade ago, in December 2008, Siemens AG agreed to pay $800 million to resolve allegations of a vast effort to build business overseas through bribes. And those fines were just in the United States. In total, between U.S. and European authorities, the German engineering giant paid $1.6 billion in a stunning settlement that was remarkable not only for the record-setting penalties but the extensive cooperation between the multiple governments.

In the decade since, cross-national cooperation has only grown, as governments have taken to sharing information more frequently and as officials have built relationships—either informally or through quarterly meetings of the Organization for Economic Cooperation and Development—in the name of stamping out corruption.

With the 10-year anniversary of the Siemens settlement approaching, Gibson, Dunn & Crutcher reflected on how enforcement of the Foreign Corrupt Practices Act has evolved during the past decade. The firm, which served as U.S. counsel to Siemens' compliance monitor following the 2008 settlement, said increased collaboration has complicated calculations around whether to self-report, as the United States and other countries have developed differing incentives for voluntary disclosure.

But recent moves, namely the so-called “piling on” memo, have shown that U.S. enforcers will credit penalties levied overseas in determining the size of settlements.

Take the Justice Department's deferred prosecution agreement with Société Générale S.A. Reached a month after Deputy Attorney General Rod Rosenstein's “piling on” memo cautioned against duplicative penalties, the Société Générale settlement required the company to pay $585 million to resolve foreign bribery charges. But the Justice Department credited the SocGen nearly $293 million in light of a parallel resolution the company reached with French regulators.

And then there's the case of Guralp Systems, the U.K.-based seismology company that scored a declination letter from the Justice Department last month following an investigation into bribes in South Korea. In the declination letter, the Justice Department noted that the United Kingdom's Serious Fraud Office was conducting a parallel investigation and the company was “committed to accepting responsibility for that conduct with the [office].”

Gibson Dunn partner Patrick Stokes, a former chief of the Justice Department unit devoted to FCPA enforcement, said the global community has largely signed on to the “piling on” memo's principles, agreeing to “share in resolutions as opposed to different countries and different enforcers taking a full pound of flesh each.”

But it's never just the dollar amount. In the Siemens case, for instance, the Justice Department tacked on a compliance monitorship—a type of arrangement that is sure to involve significant time and expense.

Under the Trump administration, monitorships appear to be going out of style. Monitors were not required in any of the Justice Department's FCPA resolutions last year, according to Gibson Dunn. A monitor was required in only one FCPA resolution this year, in the April settlement with Panasonic Avionics Corp.

So how does the Justice Department determine whether to require a compliance monitor?

“The most important question by far is the state of the compliance program at the time of resolution—whether it is adequate to, in theory, prevent the type of conduct that took place from happening again,” Stokes said. “What the department is looking for is to ensure that it's not a paper program, that it's a robust, dynamic program. It doesn't need to be a perfect program. Elements of it can still be developed over time.”

Stokes continued: “But they're looking for a company that has a responsive program in place that is seasoned and can demonstrate, through examples, how the compliance program has worked and been adjusted over time.”

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Compliance Catch-Ups

>> Tesla's legal woes are only worsening. Bloomberg reported Tuesday that Tesla is under investigation by the U.S. Justice Department over public statements made by the company's CEO, Elon Musk, that had already caught the attention of the Securities and Exchange Commission. The DOJ opened a fraud investigation after Musk tweeted in August that he was thinking of taking Tesla private and had “funding secured” for such a deal. Musk has since walked back his statement and said Tesla will remain publicly-traded—but is it all too late? Tesla says it's cooperating with the Justice Department's investigation, the NYT reports. Reuters has more here.

>> Looking to instill a culture of ethical conduct? The pharmaceutical giant Novartis has employed this tactic: Making unethical conduct hurt employees in their pocketbooks. Novartis recently revealed that, since 2016, employees have only been eligible to receive bonuses if they meet or exceed expectations for ethical behavior. The compensation system was established in 2016 as the company tried to strengthen its ethics culture after costly fines for alleged bribes and kickbacks. It apparently wasn't enough to stop former Novartis CEO Joe Jimenez from signing off on $1.2 million in payments to President Donald Trump's onetime personal lawyer and “fixer,” Michael Cohen. [Reuters]

>> They're cutting edge, sure. But financial technology firms have been slow to take up the Office of the Comptroller of the Currency's offer of a new pathway to the mainstream banking system. What's the holdup from the likes of Square and LendingClub Corp.? Uncertainty about what activities the OCC's so-called fintech charter will allow—and what regulatory requirements it will carry. And then there's the question of whether the OCC's move to grant those charters will hold up in court. A group of state regulators recently took a fresh legal stab at challenging the OCC's authority, setting up a protracted legal battle that would only make firms more hesitant to pursue a charter. [Wall Street Journal]

>> Business groups have been more than on board with the Trump administration's tax cuts and deregulatory agenda. With tariffs, not so much.After tweets, testimony, letters and calls apparently fell on deaf ears within the administration, those groups—representing some of the country's most powerful business interests—are mounting a multimillion-dollar media blitz aimed at highlighting the harm tariffs have done to companies and workers in states that supported Trump. They'll have to convince the president's supporters, who largely support the tariffs, underscoring the tension between business groups and Trump voters that lawmakers have struggled to navigate, the New York Times reports.

>> Amazon is conducting an internal investigation into the suspected data leaks and bribes of its employees, who have offered up internal data and other confidential information that can give sellers an edge on the site. The Wall Street Journal reports that the problem is particularly pronounced in China, where employees' relatively low salaries might make them more willing to open to the risk of taking bribes. In exchange, the employees have provided internal sales metrics and reviewers' email addresses, as well as a service to delete negative reviews and restore banned Amazon accounts. Employees in the United States are also suspected of taking bribes.

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Who Got the Work

>> Kirkland & Ellis partner William Stuckwisch represented United Technologies in the company's nearly $14 million settlement with the Securities and Exchange Commission resolving bribery allegations. The SEC alleged a United Technologies subsidiary, Otis Elevator Co., paid Azerbaijani officials to facilitate sales of elevator equipment for public housing in Baku and as part of a kickback scheme to sell elevators in China. United Technologies was also accused of arranging payments to a Chinese sales agent in an effort to obtain confidential information that would help it sell engines to a Chinese state-owned airline. [WSJ]

>> Citigroup, with the help of Shearman & Sterling partner Mark Lanpher, reached a $12 million settlement with securities regulators resolving claims that the bank's investment banking and financial advisory unit misled users of a so-called “dark pool” operated by one of its affiliates. The SEC found that Citi gave assurances that high-frequency traders were not allowed to trade on Citi Match, a premium-priced dark pool platform operated by a bank affiliate, even though two of its most active users reasonably qualified as such traders and had made more than $9 billion of orders through the pool. Such pools allow allow institutional investors to anonymously trade large blocks of shares without the market moving against them. [Bloomberg]

>> Cryptocurrency companies have formed the Blockchain Association lobbying group, which launched this week with Coinbase chief legal officer Mike Lempres as president. “The biggest challenge we face, from a regulatory standpoint, is lack of clarity,” Lempres told Corporate Counsel. “The rules aren't written yet. It leaves companies in a difficult situation. They want to do the right thing but it's sometimes not clear what the right thing is to do.”

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Notable Moves, Appointments & New Hires

>> Former O'Melveny & Myers financial regulatory partner Bimal Patel (above) is up for a key post at the U.S. Treasury Department. Patel was nominated last week to be assistant secretary of the Treasury for financial institutions. Since May 2017, Patel has served as the deputy assistant secretary of the Treasury for the Financial Stability Oversight Council. He joined Treasury from O'Melveny's Washington office, where he headed the financial advisory and regulation practice. Here's a link to his financial disclosure.

>> Lauren Willard is leaving Covington & Burling for the U.S. Justice Department's antitrust division, where she will be counsel to Assistant Attorney General Makan Delrahim. Willard formerly clerked for Alex Kozinski on the U.S. Court of Appeals for the Ninth Circuit, and later for now-retired Justice Anthony Kennedy. Willard focused on antitrust and appellate matters at Covington.

>> Russ Ryan has returned to King & Spalding as a partner on the special matters and government Investigations team in Washington. He joins from the Financial Industry Regulatory Authority, where he served as senior vice president and deputy chief of enforcement.

>> Viet Dinh, an independent director of the 21st Century Fox Inc. board and most recently a partner at Kirkland & Ellis, will become the new chief legal and policy officer of the combined company that will emerge from The Walt Disney Corp.'s purchase of Fox's film and TV studios in the first half of 2019.

>> Switzerland-based cryptocurrency exchange ShapeShift has hired Goodwin Procter partner Veronica McGregor as chief legal office, Corporate Counsel reports. McGregor is in charge of legal, regulatory and compliance strategies and represents ShapeShift in its interactions with regulators.

>> Mark Wolfe has stepped down down as executive director of equities compliance at J.P. Morgan Securities LLC to return to the SEC as associate director of the agency's office of derivatives policy and trading practices. Wolfe, who served as a counsel in the enforcement division during a previous stint at the agency, will now lead an office that provides legal and policy expertise to the enforcement division matters pertaining to market regulation and oversight.