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Bribery or Improper Incentives

List of Crimes Covered by the RICO Act

Three parties, State Farm, Ed Murnane, and William Shepherd, have agreed to settle a class action claiming they violated Racketeer Influenced and Corrupt Organizations (RICO) Act. The complaint says the RICO violations occurred in their attempts to overturn a $1.05 billion judgment in favor of 4.7 million State Farm policyholders in the case Avery v.

Mine on Simandou

Simandou is a mountain that is rich in minerals, but it is in the interior of Guinea, a West African country that by some accounts is one of the most corrupt places in the world. The complaint for this class action claims that Rio Tinto PLC became anxious when some of its mining rights were revoked and given to a competitor and that it paid a very large bribe to ensure that it retained its remaining rights. However, the company continued to claim it did not pay bribes and did business ethically, in violation of the Securities Exchange Act of 1934. 

Grupo Televisa Logo

The payment of bribes is generally considered wrongdoing, but securities class actions like this one, aimed at Grupo Televisa and losses from investments in its American Depository Receipts (ADRs), base their case on the company’s misleading statements or concealment of bribery, which are violations of the Securities Exchange Act of 1934. In this case, the complaint claims that Televisa claimed to be an ethical company and to forbid the payment of bribes, even though it participated in the bribery of a FIFA official to gain the rights to broadcast soccer games.

Worker in Safety Gear Gazing at Mountains

The bribery of foreign officials is a violation of the US Foreign Corrupt Practices Act (FCPA), but the complaint for this securities class action says that not telling your shareholders about the bribery is a violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint claims that Graña y Montero, SAA knew that its partner in a highway-building project, Brazilian company Odebrecht, had paid bribes in order to win the construction project.

Sinovac Logo

Bribery and corruption are secretive activities, but securities laws still require the honest reporting of these actions. According to the complaint for this class action, Sinovac Biotech Ltd. violated the Securities Exchange Act of 1934 by not reporting an instance of bribery by the company’s CEO, Weidong Yin. An analyst company’s accusation about the bribery caused the stock price to fall, set off an internal investigation, and resulted in a subpoena from the SEC. 

This securities class action lawsuit alleges that defendant VimpelCom made false and misleading statements about its business and prospects and also failed to disclose material facts concerning its payment of unlawful bribes in order to secure the company's access to Uzbekistan's telecommunications market and the fact that those actions led to probes and criminal investigations by the SEC, Dutch authorities and the U.S. Department of Justice.

This securities class action alleges that TCP International Holdings failed to disclose material facts relating to the company's chairman and improper personal payments he made relating to the business, did not disclose improper relationships with he had with vendors and misled investors with regard to the company's business operations and future prospects.