Petrobras Sovereign Immunity Claim Fostered Leniency, Lawyers Say

Oct 11, 2018

Jodi Avergun comments on the DOJ’s hesitation to push for tougher terms in Petrobras’s recent $853 million settlement because of the unusual circumstances under which the company entered into the resolution.

An excerpt from "Petrobras Sovereign Immunity Claim Fostered Leniency, Lawyers Say," GIR, October 11, 2018:

Jodi Avergun, chair of Cadwalader Wickersham & Taft’s white-collar practice group, said the sovereign immunity argument probably had “the most legs” when it came to securing the NPA. Other contributing factors could be that prosecutors may have thought their jurisdiction was too tenuous to push a DPA or plea agreement, she said. They may also have wanted to defer to Brazil, Avergun said, and reflect a policy the DOJ formalised in May that discourages unnecessary “piling on” of enforcement actions for the same conduct. As well as entering into a settlement with the DOJ, the SEC and Brazilian authorities, the company had already paid investors $2.95 billion in a US class action.

Avergun proposed that the DOJ could have simply been satisfied with the company’s extensive remediation, not to mention the hundreds of millions of dollars it forked out to authorities.

She continued that she doesn’t think the NPA was “an easy deal”. Citing the colossal impact the Petrobras scandal has had on Brazil, including the prosecution of several of the country’s own politicians, Avergun said: “The country was nearly destroyed as a result. I think the DOJ is saying that there was quite a bit of punishment already.”

 

CadwaladerSpotlight

January 14-16 | Cadwalader is sponsoring the 2019 CREFC January Conference in Miami.

CREFC is the trade association for the commercial real estate finance industry.

Cadwalader's research and intelligence platform provides analysis on changes in U.S. financial regulation. Subscribers receive a daily newsletter interpreting new laws, rules and enforcement actions that impact financial institutions.