924 F. Supp. 2d 539
S.D.N.Y.2013Background
- SEC sued Uriel Sharef, Ulrich Bock, Carlos Sergi, Stephan Signer, Herbert Steffen, Andres Truppel, and Bernd Regendantz for Exchange Act violations; Steffen moves to dismiss for lack of personal jurisdiction and timeliness.
- Siemens AG is a German-based multinational; bribery scheme allegedly paid Argentina officials from 1996 to 2007, with about $100 million in bribes and about $31.3 million after 2001 when Siemens fell under U.S. securities laws.
- The contract for national identity cards (approx. $1 billion) was pursued amid bribe demands; contract was canceled and later a World Bank ICSID arbitration sought to recover losses; bribery cover-ups were alleged to accompany the arbitration claim.
- Steffen, as Group President of Siemens Transportation Systems, allegedly recruited to facilitate bribes; urged Regendantz to pay; his direct involvement in authorizing or signing falsified documents is not alleged.
- Payments were made through SBS, including a $5.2 million transfer via Uruguay and a $4.7 million second payment; fictitious invoices were created; some payments routed to New York accounts.
- Regendantz signed quarterly/annual SOX certifications falsely representing SBS’s financials; Steffen is not alleged to have signed or knowledgeably approved these falsifications; court concludes lack of minimum contacts and dismisses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has personal jurisdiction over Steffen | Steffen’s conduct caused US-reliant filings and knowingly affected US investors. | Steffen’s role was attenuated, he did not authorize bribes, nor direct or participate in cover-ups or filings. | No; lack of minimum contacts and unreasonableness require dismissal. |
Key Cases Cited
- International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts and reasonableness requirements for jurisdiction)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (U.S. 1980) (foreseeability alone insufficient for jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and minimum contacts principle)
- Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (U.S. 1987) (limits of jurisdiction in international context; purposeful availment considerations)
- In re Parmalat Sec. Litig., 376 F. Supp. 2d 449 (S.D.N.Y. 2005) (participation in issuance of false financials and knowledge of effects in the U.S. can support jurisdiction)
- SEC v. Straub, 921 F. Supp. 2d 244 (S.D.N.Y. 2013) (executives manipulating reported earnings can confer jurisdiction)
- Leasco Data Processing Equipment Corp. v. Maxwell, 468 F.2d 1006 (2d Cir. 1972) (activity in interstate commerce and foreseeability standards for jurisdiction)