Petrobras corruption scandal provides anti-bribery policy lessons

Brazilian state-run oil company Petróleo Brasileiro SA, or Petrobras, said this week that it had agreed to settle a shareholder lawsuit by The Vanguard Group, an investment management company, to recover corruption-related losses. The case offers notable lessons in anti-bribery governance and oversight.

Petrobras did not disclose the terms of the agreement, but the company said it will raise its financial provision for settlements with shareholders to $445 million from $372 million.

The oil company has been the target of more than two dozen lawsuits by shareholders in recent years as a result of a massive corruption scheme in which Petrobras executives allegedly took bribes from contractors who had overcharged the company for work. The company claims it was a victim of the graft. read more »

Government Behavior Overtakes Conditions of Payment in FCA Actions

Two recent False Claims Act wins for defendants point to the new emphasis courts are placing on government reaction to alleged fraud in determining whether regulatory violations were material to payment decisions.

FCA allegations that Brookdale Senior Living submitted fraudulent home health claims missing key physician signatures and certifications were dismissed June 22, while Bristol-Myers Squibb and Sanofi-Aventis U.S. escaped allegations of improper marketing and fraudulent Medicare claims for the drug Plavix June 27. 

Shkreli’s Trial Not On Drug Prices, But This ‘Ponzi-Like’ Scheme

Self-described “pharma bro” Martin Shrkeli made headlines for raising the price of a drug for AIDS patients over 5,000 percent, but that's not why he's in court this week.

Instead he faces eight counts of wire and securities fraud related to his time as portfolio manager of two hedge funds, MSMB and MSMB Healthcare, and as founder and CEO of a pharmaceutical company Retrophin. read more »

Controversial ‘Hunger Bonds’ Make Their Way Onto the Market

The term “hunger bonds” for Venezuelan government debt took off after the Goldman deal, with critics arguing that President Nicolas Maduro’s decision to keep servicing overseas notes is inhumane given shortages of food, medicine and other basic goods. The argument among supporters of the movement is that providing financing to the government props up an administration whose corruption and incompetence have ruined a nation that’s home to more untapped oil wealth than any other country on earth.

Julio Borges, the head of Venezuela’s National Assembly, last week asked U.S. authorities to investigate the transaction, saying that it fleeced the country for the benefit of political elites. In a detailed account addressed to the U.S. Securities and Exchange Commission, the Financial Crimes Enforcement Network and Financial Industry Regulatory Authority, Borges said that "there is enough evidence of wrongdoing for the U.S. government to start an investigation against Goldman Sachs and Nomura” under the Foreign Corrupt Practices Act. read more »

Philadelphia District Attorney Pleads Guilty to Bribery and Resigns

District Attorney R. Seth Williams pleaded guilty to bribery and quit his position as Philadelphia’s chief law enforcement officer on Thursday, bringing to an abrupt halt his trial on federal corruption charges.

The sudden plea came after some two weeks of testimony in which prosecutors alleged that Mr. Williams took cash and gifts from businesspeople in return for offers of legal help with their cases or those of their friends. read more »