Tagged: bribery

COSO Framework: Fraud, Corruption and Compliance (Part I of II)

Global companies need to actively work to prevent fraud and corruption. Fraud and corruption go hand-in-hand. To commit bribery, bad actors have to gain access to money for unauthorized (illegal) purposes. A failure to prevent fraud and corruption can have significant legal, financial and reputational consequences. Luckily, companies are devoting additional resources to assess fraud and bribery risks with specific focus on internal financial and...

Anti-Corruption Compliance: The Need to Look Under the Cloak of Materiality

Sarbanes-Oxley revolutionized the auditing profession. Section 404 imposed stringent requirements for disclosure of the state of a company’s internal controls and financial reporting. The company’s independent auditor is required to report on the effectiveness of the company’s internal controls, and include bribery, theft and fraud. The requirements are intended to prevent a material misstatement of the company’s financial statements. The key term of art surrounding...

Lessons Learned from AstraZeneca’s $5.5 Million SEC FCPA Settlement

Last week, the SEC added another pharmaceutical company to its list of FCPA violators when AstraZeneca agreed to a $5.5 million settlement with the SEC. AZ is now the 25th drug or medical device company to pay an FCPA penalty for violating the FCPA. AZ’s violations were not limited to China as a number of recent FCPA enforcement actions against drug/medical device companies, but included...

Anti-Corruption, Sanctions and Export and Import Risks

Forgive me for overusing the term “convergence” but when the shoe fits, I say “wear it.”   If you are managing corporate risks and are responsible for securing export licenses, ensuring that you are complying with OFAC sanctions requirements, interacting with customs and immigration officials around the globe, and conducting third party due diligence to onboard a new agent or distributor, there is no question that...

Drug Companies and Charitable Patient Foundations

Charitable organizations can easily become enmeshed in Justice Department enforcement issues. We have seen charities used in FCPA cases as a means to funnel bribes to government officials, spouses or family members. In the domestic world of drugs and anti-kickback laws, drug company relationships with patient foundations are now being examined for possible violation of anti-kickback laws. Government scrutiny of drug prices is occurring on...

FCPA Compliance: Does “Anything of Value” Really Mean “Anything of Value”?

The FCPA statute is not as vague as some contend. I remember the words of a former FTC Chairperson who told me once – “The Clayton Act is not vague. I just read the law and apply it to the facts.” Not to be too simplistic, I recognize there are legitimate disputes surrounding application of the FCPA to specific situations. As one example, I have...

The FCPA Implications of the Supreme Court’s McDonnell Decision – A Mountain Out of a Molehill?

The Supreme Court’s decision in the McDonnell case was expected. It was evident that the Supreme Court was going to reverse the convictions when it granted a stay of McDonnell’s sentence and agreed to hear the case. Sometimes we all suffer from FCPA myopia and see the world only through the FCPA lens. The McDonnell case has very little that is directly applicable to the...

The SEC’s Love Affair with Internal Controls

The SEC has been flexing its muscles lately. If you had some of the enforcement tools the SEC has, you would be doing the same. What am I referring to? The FCPA statute includes broad provisions requiring companies to maintain adequate internal controls and accurate books and records. If taken literally, these prohibitions can be applied to many situations to support aggressive SEC enforcement actions....

Akamai and Nortek – DOJ Touts Declinations Under FCPA Pilot Program

DOJ’s FCPA Unit knows what they are doing. In the immediate weeks after the release of the FCPA Pilot Program, DOJ publicly released two declination letters for Akamai Technologies and Nortek, Inc. and the SEC announced disgorgement settlements of $671 thousand and $321 thousand, respectively. These two actions, however, will not solve DOJ’s bigger problem – the FCPA Pilot Program needed to offer a bigger...

Corruption Risks and Corporate Social Responsibility Spending

Global companies have been embracing socially responsible spending projects to build stronger relationships with local communities. The idea makes a lot of sense and real projects can result in real benefits. As with any significant source of money, there are risks. Major global companies have been caught in some embarrassing situations, some of which can have real legal and reputational consequences. Think of the irony...