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....
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...
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...
We all suffer from a little myopia. Following FCPA enforcement and compliance issues makes a lot of sense in today’s enforcement environment. However, there is plenty of domestic enforcement of bribery laws – the New York corruption investigations and prosecutions and the recent high-profile prosecution of Virginia Governor McDonnell are just a few of the high profile domestic prosecutions. The Supreme Court recently heard argument...
Let’s start with a big “If.” I know that sounds like a real turn off but bear with me. Assuming that the Justice Department is ready to turn over a new approach to criminal enforcement and aggressively prosecute culpable individuals in white collar crime investigations, would it be a good idea to offer a pass, or leniency to the company if the company self-reports the...
Just to add to the cacophony of voices campaigning during this primary season, DOJ, SEC, FINRA, and CFTC officials launched their own campaign promoting recent initiatives to increase corporate self-reporting of potential violations. After months of announcements, which were preceded by internal wrangling and bureaucratic leaks, DOJ has put in place its new initiative – the Yates memorandum to focus on individual culpability and a...
When compliance officers read about a major Justice Department settlement action, we can all hear the collective sigh of relief – “Thank goodness, that did not happen here in my company.” The recent Olympus settlement is another in a long line of cases where any shred of corporate culture of integrity has been replaced with a culture of bribery and kickbacks, or other kids of...
The Securities and Exchange Commission continues its steady march as the prominent FCPA enforcement agency against corporations. The Justice Department has not brought any enforcement actions this year and continues to reevaluate its FCPA compliance program. In an interesting enforcement action, the SEC settled a case with SciClone Pharmaceuticals for $12.8 million for violations occurring in China. Unlike many other SEC enforcement actions, the SEC’s...
Corruption risks follow the money. If a company has effective controls over money, then the company has a good chance of mitigating corruption risks. A key indicator of a company’s internal controls is to ask if the company has suffered any significant fraud in the last five years. If your company has experienced a high fraud rate, the company’s controls may be weak and corruption...
The FCPA can create a very one-sided view of corruption. The bribe payer is punished and most times the recipient is not. The Justice Department has used creative approaches to ensnare recipients as in the Direct Partners enforcement action, but for the most part the recipients are not punished nor even publicly identified. Bribery demands can occur in a variety of contexts; sometimes they are...
