February 26, 2013

Two Recent Decisions Address Jurisdiction over Foreign Defendants in FCPA Cases

Arnold & Porter Advisory

Two federal judges in the Southern District of New York recently issued two decisions addressing whether US courts had jurisdiction over foreign individuals whom the Securities and Exchange Commission (SEC) charged with violating the Foreign Corrupt Practices Act (FCPA). In SEC v. Straub, Judge Richard Sullivan denied defendants' motions to dismiss, finding that personal jurisdiction existed over Hungarian citizens who allegedly directed bribes paid by Magyar Telekom, Plc (Magyar) to Macedonian government officials and who allegedly signed misleading management representation letters and false SEC filings. In SEC v. Steffen, however, Judge Shira Scheindlin granted a defendant's motion to dismiss, finding that personal jurisdiction did not exist over a German citizen allegedly involved in bribes paid by Siemens Aktiengesellschaft to Argentine government officials because the defendant was not alleged to have participated directly in the falsification of financial statements relied upon by US investors. The distinction between these two cases - whether the defendant played a role in the falsification of SEC filings and thus directed conduct toward the United States - suggests a limiting principle regarding the extent of the FCPA's reach.

Email Disclaimer