SEC Charges Former Executive with FCPA Violations
Litigation Release No. 24666 / November 15, 2019
Securities and Exchange Commission v. Jerry Li, No. 19-cv-10562 (S.D.N.Y. filed Nov. 14, 2019)
On November 14, 2019, the Securities and Exchange Commission charged Jerry Li, a Chinese national and the former managing director of a U.S.-based direct selling company in China with bribing government officials in China in violation of the Foreign Corrupt Practices Act.
The SEC's complaint alleges that from 2006 to 2016, Li orchestrated a scheme in China to bribe local, provincial, and national government officials in order to obtain direct selling licenses and curtail government investigations of his company's business practices. The complaint further alleges that Li directed that the bribes be made through payments of cash, gifts, travel, meals and entertainment, and that Li falsified company expense reports to conceal the bribes.
The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges Li with violating Sections 13(b)(5) and 30A of the Securities Exchange Act of 1934 and Rule 13b2-1 thereunder, and with aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. The SEC is seeking a permanent injunction and monetary penalties against Li.
In a parallel action, the U.S. Attorney's Office for the Southern District of New York and the Department of Justice today announced criminal charges against Li.
The SEC's continuing investigation is being conducted by Liora Sukhatme, Jack Kaufman, Christopher Mele, and Gerald A. Gross of the New York Regional Office, with assistance provided by Sonali Singh, Tracy Linkins Price and Charles Cain of the Division of Enforcement's FCPA Unit. The litigation against Li is being led by Mr. Kaufman, and the case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Department of Justice, and the Federal Bureau of Investigation.