It was recently announced that Switzerland mining giant Glencore had received a subpoena from the U.S. Justice Department regarding its operations in the Democratic Republic of Congo, Nigeria, and Venezuela for possible FCPA violations. The matters under Justice Department scrutiny in the Republic of Congo are in relation to mining operations, while the matters under review in Nigeria and Venezuela is the company’s ventures in oil trading through those two energy-producing nations. The subpoena seeks information going back to 2007.
Interestingly, Glencore’s stock took a decided dive on the announcement of the subpoenas being issued, with share prices dropping from just over £3.55 (U.S. $4.70) to just over £3 (U.S. $4) in one day. The reason for this dramatic drop was not immediately made clear, but it may have been because of the potential length of an FCPA investigation and potential fines and penalties if a violation was uncovered. Further, it may be the company has signaled that it would fight any such charges through the simple fact that the Justice Department was required to issue a subpoena for such documents. Equally interesting was the timing of a stock buy-back program, announced by the company last week as well.
