Two men share securities regulation news

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Securities Regulation Daily, October 24, 2016

Embraer settles FCPA charges for $205M

By Anne Sherry, J.D.

Embraer agreed to pay more than $205 million to resolve allegations that it bribed officials to secure aircraft contracts. The company will disgorge its $83 million in profits, plus interest, back to the SEC and pay a $107 million penalty to the Justice Department. The DOJ credited Embraer for cooperating in the investigation once it got started, including by providing information about complicit individuals (U.S. v. Embraer S.A., October 24, 2016; SEC v. Embraer S.A., October 24, 2016).

According to the SEC’s complaint, Embraer routed bribes through a U.S. subsidiary to officials in the Dominican Republic, Saudi Arabia, and Mozambique between 2008 and 2011. Embraer also allegedly created false books and records and engaged in an accounting scheme in India, in violation of the Foreign Corrupt Practices Act.

As part of the deferred prosecution agreement, Embraer admitted to its involvement in a conspiracy to violate the FCPA’s anti-bribery and books-and-records provisions and to its willful failure to implement an adequate system of internal accounting controls. In addition to the $107 million criminal penalty, the company must continue to cooperate in the investigation, enhance its compliance program, implement stronger internal controls, and retain a corporate compliance monitor. The $98 million disgorgement agreed to between Embraer and the SEC will be reduced by the $20 million the company has agreed to disgorge to Brazilian authorities.

Justice Department officials have recently spoken about the importance of full cooperation in an investigation, and the Department’s press release explains the cooperation credit granted to Embraer. Embraer cooperated fully in the DOJ’s investigation once the SEC subpoenaed it, disclosing all relevant, non-privileged facts, including about individuals involved in the misconduct. But Embraer did not engage in full remediation: although the company disciplined a number of employees and executives, it did not discipline a senior executive who was aware of bribery discussions and supervised the employees engaged in those discussions. The criminal penalty is 20 percent below the bottom of the applicable range under the sentencing guidelines, "a discount that reflects Embraer’s full cooperation but incomplete remediation."

The case is Nos. 16-cr-60294 and 16-cv-62501.

Attorneys: Ernesto Palacios for SEC. Jason Linder, U.S. Department of Justice, for the United States.

Companies: Embraer SA

MainStory: TopStory AccountingAuditing Enforcement FraudManipulation InternationalNews FloridaNews

Back to Top

Securities Regulation Daily

Introducing Wolters Kluwer Securities Regulation Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.