A team of Davis Polk lawyers based in New York and London have represented Siemens AG in connection with the largest case under the Foreign Corrupt Practices Act (FCPA) to date. Davis Polk has represented Siemens AG in criminal and regulatory matters over the past two years, including acting as counsel in, and negotiating the resolution of, the proceedings of the Securities and Exchange Commission (SEC) and Department of Justice (DOJ), and coordinating the company’s global defense with respect to international governmental investigations. Davis Polk also advised Siemens on related corporate and disclosure matters.
Today, the US District Court for the District for Columbia approved the resolution of criminal and civil investigations by the DOJ and the SEC into violations of the FCPA by Siemens AG and certain subsidiaries. Siemens AG pleaded guilty to charges of knowingly circumventing and failing to maintain adequate internal controls and failing to comply with the books and records provisions of the FCPA. Three Siemens foreign subsidiaries also pleaded guilty to individual counts of conspiracy to violate the FCPA. In connection with these pleas, Siemens and the three subsidiaries agreed to pay a fine of $450 million to settle charges of the DOJ. Siemens also settled a civil action against it brought by the SEC alleging claims under the anti-bribery, internal controls and books and records provisions of the FCPA. Siemens agreed to the disgorgement of profits in the amount of $350 million.
The sentences reflect the DOJ's express recognition of Siemens’ “extraordinary cooperation” in conducting an internal investigation, as well as Siemens' new and comprehensive compliance program and extensive remediation efforts. Based on these facts, the Defense Logistics Agency, the lead agency for US federal government contracts, issued a formal determination that Siemens remains a responsible contractor for US government business.
Under the terms of the plea and settlement agreements, Siemens has engaged Theo Waigel, former German Finance Minister, as its compliance monitor to evaluate and report on the company’s progress in implementing and operating its new compliance programs. At Siemens’ suggestion, Waigel will be the first non-American appointed to serve as a compliance monitor.
Contemporaneously, in Munich, Germany, the public prosecutor announced the termination of legal proceedings against Siemens for failure to supervise its operations effectively. Siemens accepted to pay a fine of €395 million. In a similar action in October 2007 relating to Siemens' former telecommunications group, Siemens paid €201 million to terminate legal proceedings against it.
The Davis Polk team was led from New York and London by partners Robert B. Fiske Jr., John P. Cooney Jr., Scott W. Muller, John W. Banes (London office), Angela T. Burgess, Paul Spagnoletti, counsel Margaret M. Ayres from the Washington, DC office and partner Patrick S. Kenadjian of the Frankfurt office. The litigation team included counsel Lynn Earl Busath and associates James W. Haldin, Douglas K. Yatter, Willow D. Crystal, Candy M. Lawson, Antonio J. Perez-Marques, Christopher A. Botsman, John D. Couriel, Tatiana R. Martins, Ronja Bandyopadhyay, Una A. Dean, Nahal Kazemi, Elena Ivanovski, Chiawen C. Kiew, Boris Ayala, Jason McCullough, Christian M. Moser, Alexis G. Stone and Emmet P. Ong, all from the New York office, and associate Bethany K. Hipp from the Washington, DC, office. The corporate team included associate Petja Toskan from the London office, former associate Jennifer S. Mittelsteadt from the Frankfurt office and associate Siobhan Dalton from the Paris office.