Presenting a live 90-minute webinar with interactive Q&A Effective Antitrust Compliance Programs: Preventing Violations and Minimizing Penalties Implementing Mechanisms to Detect Wrongdoing, Leveraging Compliance Programs in Investigations and Sentencing T UESDAY, SEPTEMBER 23, 2014 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Deirdre A. McEvoy, Counsel, Patterson Belknap Webb & Tyler, New York Mark Rosman, Partner, Wilson Sonsini Goodrich & Rosati, Washington, D.C. Douglas M. Tween, Partner, Baker & McKenzie, New York The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. 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FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: •Click on the ^ symbol next to “Conference Materials” in the middle of the left- hand column on your screen. •Click on the tab labeled “Handouts” that appears, and there you will see a PDF of the slides for today's program. •Double click on the PDF and a separate page will open. •Print the slides by clicking on the printer icon. Effective Antitrust Compliance Programs Developing and Implementing Programs to Meet Regulatory Requirements and Detect Potential Violations Deirdre A. McEvoy September 23, 2014 5 What is an Antitrust Compliance Program? • Formal corporate-wide program, with top-level buy-in, designed to prevent antitrust violations Educate company personnel on the antitrust laws ■ Address both civil and criminal antitrust violations ■ • If not successful in preventing antitrust violations, want program to detect wrongdoing as early as possible, while damages are still small Significant benefits possible in detecting criminal antitrust violations early ■ 6 Antitrust Compliance and Cartels • Compliance programs often are particularly important in preventing and detecting cartel activity Cartels can engage in a wide-variety of illegal conduct ■ Price-fixing ■ Bid-rigging ■ Coordinated sales ■ Customer and territorial allocation ■ Red flags regarding potential cartel activity* ■ Increased trade association activity; ■ Sales transactions between your company and its competitors, particularly around the end of the ■ year; Data indicating market shares more stable than would be expected for the industry; ■ Executives receiving calls at home or from callers giving fictitious names or refusing to identify ■ themselves; and Sudden, unexplained price increases and copies of competitors’ price announcements in your ■ files. *Antitrust Compliance Programs: The Government’s Perspective, Address by William J. Kolasky, Deputy Assistant Attorney General for Antitrust, Antitrust Division, US Department of Justice, before the Corporate Compliance 2002 Conference, Practicing Law Institute, San Francisco, California, July 12, 2002 7 Why Are Antitrust Compliance Programs Important? • Substantial civil repercussions for antitrust violations Private antitrust suits may result in treble damages ■ Private suits and civil investigations by antitrust authorities are costly and ■ distracting Implications for future mergers, acquisitions and joint ventures ■ • Serious criminal repercussions for antitrust violations Monetary fines ■ Corporate fines - $100M per offense or twice the gain or loss ■ Individual fines – from $350,000 - $1M per offense ■ Possible prison sentence ■ Maximum term of 10 years per offense, even first-time offenders ■ 8 Why Are Antitrust Compliance Programs Important? • Compliance programs are critical when violations occur McNulty memo ■ Existence and effectiveness of a compliance program an element in ■ determining whether and how to prosecute, although not sufficient standing alone to justify non-prosecution Leniency program ■ Sentencing Guidelines ■ Federal court may depart from standard fines and jail terms, and impose a ■ lesser sentence, if compliance program in place Antitrust Criminal Penalty Enhancement and Reform Act of 2004 ■ Limits damages recoverable from a corporate amnesty applicant to the ■ damages it actually inflicted if the applicant cooperates with private plaintiffs in their damages actions against remaining cartel members 9 Why Are Antitrust Compliance Programs Important? • The impact of antitrust violations is very real Criminal fines in the hundreds of millions ■ Criminal antitrust fines in excess of $1 billion in 2013 ■ Auto Parts: multi-year investigation resulting in over $2 billion in fines, including: ■ Bridgestone Corporation: $425M fine (2014) ■ Furukawa Electric Co. Ltd.: $220M fine (2012) ■ Yazaki Corporation: $470M fine (2012) ■ AU Optronics: $500M fine (2012) ■ 25 months average jail time (2010-2013) ■ • Aside from fines and jail, the time, cost, and distraction to a company of an investigation and follow-on litigation cannot be underestimated 10