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FCPA Flash Podcast – A Conversation With Thomas Gorman Regarding The SEC’s Recent Internal Controls Report Of Investigation

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation  with Thomas Gorman (Dorsey & Whitney, former Senior Counsel in the SEC’s Division of Enforcement, and founder and editor of the informative SEC Actions blog). In the episode, Gorman discusses the SEC’s recent report of investigation relevant to the FCPA’s internal controls provisions, whether certain emerging FCPA issues should have been addressed through a report of investigation as opposed to an enforcement action, and common SEC internal controls enforcement theories including the “prevent and detect” standard not even found in the FCPA.

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Obvious Parallels To Certain FCPA Enforcement Actions In The SEC’s Recent Report Of Investigation


I’ve long believed that in certain instances, the SEC should use its Section 21(a) report of investigation powers to address emerging Foreign Corrupt Practices Act issues rather than bring an actual enforcement action.

Recently the SEC did just that in this report “regarding certain cyber-related frauds perpetrated against public companies and related internal accounting controls requirements.”

As highlighted below, in the report the SEC cites FCPA legislative history, prior SEC FCPA guidance, and otherwise takes positions in the report that seemingly undermine its internal controls enforcement theories in many traditional FCPA enforcement actions involving alleged foreign bribery.

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Issues To Consider From The Stryker Enforcement Action


This previous post highlighted the SEC’s recent $7.8 million enforcement action against medical device company Stryker.

This post continues the analysis by highlighting additional issues to consider.

Two Ways to Look at Repeat Offenders

As highlighted in the prior post, Stryker is now in the FCPA repeat offender club. There are two ways to look at certain of the companies on the list.

On the one hand, one could view these companies as corrupt companies without a commitment to compliance who did not learn any lesson from the first time the company resolved an FCPA enforcement action.

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Issues To Consider From The United Technologies Enforcement Action


This prior post went in-depth into the SEC’s $13.9 million Foreign Corrupt Practices Act enforcement action against United Technologies Corp. and this post continues the analysis by highlighting additional issues to consider.


As highlighted in this prior post, UTC’s FCPA scrutiny began in late 2013/early 2014. Thus, from start to finish its scrutiny lasted approximately 4.5 years.

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United Technologies Corp. Resolves $13.9 Million Enforcement Action


Yesterday, the SEC announced that United Technologies Corporation resolved a $13.9 million Foreign Corrupt Practices Act enforcement action.

The conduct at issue concerned Otis Elevator Co. (a wholly-owned subsidiary of UTC), Pratt & Whitney (an operating division of UTC), and International Aero Engines (a joint venture of five aerospace companies including Pratt & Whitney) regarding a Russian and Azerbaijani improper payment scheme, a China aviation scheme, improper payments for Otis Elevator sales in China, and leisure travel for foreign officials from several countries including China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia.

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