SEC Obtains Default Judgment Against Former Executive for Fcpa Violations

Litigation Release No. 25442 / July 11, 2022

Securities and Exchange Commission v. Jerry Li, No. 19-cv-10562 (S.D.N.Y. filed Nov. 14, 2019)

On June 27, 2022, the U.S. District Court for the Southern District of New York entered a final judgment against Jerry Li, the former managing director of a U.S.-based direct selling company in China who was previously charged with bribing government officials in China in violation of the Foreign Corrupt Practices Act.

The SEC's complaint alleged 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 alleged 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 judgment, entered on the basis of default, enjoins Li from violating or aiding and abetting violations of Sections 13(b)(5) and 30A of the Securities Exchange Act of 1934 and Rule 13b2-1 thereunder, and aiding and abetting violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. Li is also ordered to pay a civil penalty of $550,092.

The SEC's litigation was led by Jack Kaufman and Liora Sukhatme and supervised by Gerald Gross and Preethi Krishnamurthy of the New York Regional Office. Further assistance was provided by Sonali Singh, Tracy L. Price and Charles Cain of the Division of Enforcement's FCPA Unit. 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.