Free Consultation | (800) 259-9010 International via WhatsApp: 713-227-2400 (text only)
Investor Lawyers BlogSEC Cases: Embraer Settles FCPA Charges for $205M, Bank Leumi is Charged with Engaging Unregistered US Cross-Border Business, and Lime Energy Company and Executives Settle Accounting Fraud Charges
Aircraft Manufacturer Settles FCPA Violation Charges With the SEC and DOJ for Over $205MEmbraer S.A. has arrived at a global settlement with the U.S. Securities and Exchange Commission, the U.S. Department of Justice, and Brazilian authorities. The agreement resolves allegations that the aircraft manufacturer violated the Foreign Corrupt Practices Act, and it requires the company to pay over $205M.According to the SEC’s complaint, Embraer made over $83M because of bribe payments made by its subsidiary in the US. The payments were made via third-party agents to foreign government officials in Saudi Arabia, the Dominican Republic, and Mozambique, as well as an agent in India. The company allegedly generated false records and books to hide the illegal payments and took part in an accounting scam in India.To settle, Embraer will pay the DOJ $107M as part of a deferred prosecution deal and over $98M to the SEC in disgorgement plus interest. It is also expected to pay disgorgement to authorities in Brazil in that country’s civil case.
Bank Leumi to Pay $1.6M, Admits Wrongdoing in SEC CaseBank Leumi, which is based in Israel, will pay $1.6M to resolve SEC charges accusing it of inducing securities transactions and providing investment advice to US customers even though the bank was not a registered broker-dealer or investment adviser in the country. The unregistered U.S. cross border business took place for years.The Commission found that Bank Leumi kept up several hundred securities accounts beneficially owned by customers in the US and managed over $500M in securities assets for these customers. Even though the Israeli-based bank left the U.S. cross border business eight years ago, about 100 U.S. customer securities accounts stayed open for up to three years afterwards. Meantime, bank employees stayed in contact with their U.S. customers.Because of its U.S. cross-border business, Bank Leumi made $3.3727 million in profits. As part of its deferred prosecution deal with the U.S. DOJ almost two years ago, the bank disgorged $3.307M. Now, in settling with the SEC, it has to disgorge the remaining $65,700, pay over $8700 in interest, and a $1.5M penalty. Bank Leumi admitted to the facts in the SEC order, acknowledging that its behavior violated federal securities laws in the U.S.Energy Services Provider Settles Accounting Fraud Allegations for Over $1MLime Energy Co. has consented to pay $1M to settle SEC charges accusing it and four executives of accounting fraud. According to the regulator, the energy services provider improperly recognized $20M in revenue from around ’10 to ’12. Former company executives VP of Operations Joaquin Dos Santos Almeida and Operations Director Karan Raina allegedly booked the revenue even though the required documentation did not arrive on time. They allegedly continued to recognize revenue before what accounting principals allowed because of pressure to garner results. They even allegedly told internal accountants to book revenue on nonexistent jobs.Meantime, former corporate controller Jiulianne M. Chandler accepted accounting entries, booking millions of dollars in additional 2011 revenue after the year had ended. Former EVP James G. Smith is accused of sending Chandler new entries providing even more revenue to improperly recognize when it became clear in February 2012 that Lime Energy needed $500K to satisfy its revenue target for 2011.Smith will pay a $50K penalty and serve a five-year bar from serving as a public company director or officer for five years. Chandler will pay a $25K penalty and serve a similar bar. Almeida also agreed to an officer-and-director bar—a permanent one—and Raina will pay a $50K penalty. None of them are denying or admitting to the SEC allegations.