Compliance Week Quotes Steptoe’s Lucinda Low in Article on SciClone Pharmaceuticals’ FCPA Settlement

Steptoe partner Lucinda Low, who heads the firm’s FCPA practice, was quoted in a Compliance Week article that explored the deal reached by SciClone Pharmaceuticals to settle a consolidated shareholder lawsuit stemming from alleged violations of the Foreign Corrupt Practices Act in the company’s interactions with regulators and government-owned entities in China.  As part of the agreement, SciClone has agreed to adopt certain corporate governance reforms and pay $2.5 million in plaintiffs’ legal fees through its director-and-officer insurance policy.

According to the article, published November 29, most companies that have recently established robust compliance programs were motivated to do so by federal prosecutors.  In the SciClone case, the article states that the company adopted the program to appease shareholders.

As Ms. Low explained, typically, the intent of a shareholder derivative lawsuit – where shareholders sue the board over allegations of bad management – is to get the company’s officers and directors to enter into a settlement of monetary damages.  “I’m not aware of any other case, certainly in the FCPA area, where this sort of result has occurred.”

Ms. Low further explained that as part of the agreement, SciClone must retain a compliance coordinator fluent in Mandarin and English, whose duties mirror those of both a chief compliance officer and an external monitor.

The Compliance Week article was based on a Steptoe International Law Advisory.  Along with Ms. Low, the advisory was authored by of counsel Sean Griffin and associate Shannon MacMichael.

To read the full article, visit Compliance Week (subscription required).