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FCPA Reform Related Scholarship

Three articles of interest regarding various aspects of FCPA reform to pass along.

Choosing Governance In The FCPA Reform Debate

Joseph Yockey (University of Iowa College of Law) recently published the above article in the Journal of Corporation Law.

The abstract is as follows.

“The recent rise in enforcement under the U.S. Foreign Corrupt Practices Act (FCPA) has led to a vigorous debate about the need for reform. Critics say the statute is overenforced and harms shareholders. Regulators disagree and argue in favor of the status quo. This Article examines both sides of the FCPA reform debate and finds them wanting on several levels. First, a variety of factors suggest that critics’ fears of overenforcement are often exaggerated. That said, proponents of existing enforcement efforts who believe that nothing needs to change are also mistaken. Instead of overenforcement, there is a risk that the FCPA is being underenforced. Instead of encouraging firms to develop anticipatory and sustainable compliance programs, current enforcement policy incentivizes a focus on static programs that are incapable of addressing the dynamic risk of corruption. Finally, the present regulatory model fails to adequately address how gaps in international anti-corruption enforcement pose unique compliance challenges on the domestic front.

This Article seeks win-win solutions to these problems by recommending a shift of focus toward regulatory strategies designed around principles of collaboration and experimentation that fall within the category of “new governance.” Through a governance-based approach to regulation, firms are expected to better institutionalize context-specific compliance tools developed in consultation with the state and other actors. This approach — when ongoing and initiated outside the context of a specific enforcement action — ought to produce more effective and efficient self-regulation and fewer instances of bribery. The public−private learning process envisioned by new governance should also enhance the United States’ efforts to promote international anti-corruption norms and help level the playing field for American firms.”

Yockey’s other recent FCPA scholarship includes: FCPA Settlement, Internal Strife, and the ‘Culture of Compliance’ (Wisconsin Law Review) and Solicitation, Extortion and the FCPA (Notre Dame Law Review).  Yockey was previously an attorney at Sidley Austin LLP in Chicago.

The New Era of FCPA Enforcement: Moving Towards a New Era of Compliance

Thomas Gorman (Dorsey & Whitney) and William McGrath recently published the above article in Securities Regulation Law Journal.

The abstract is as follows.

“The DOJ and the SEC are aggressively enforcing the FCPA in what has come to be called the New Era of FCPA enforcement. Those efforts are reflected by expansive interpretations of the statute, the increasing use of industry sweeps, spiraling costs to settle corporate cases and a focus on individuals, coupled with demands for longer prison sentences. This has spawned increasing demands for amendments to the statutes. Congress has considered the question but not acted. Enforcement officials could spur compliance by amending their prosecution guidelines to include items such as a compliance defense but have not. Yet business organizations and their employees remain at risk. To avoid or at least mitigate liability, business organizations need to step-up and implement reasonable compliance systems and begin a new era of compliance.”

Gorman is a former SEC enforcement attorney and author of the site SEC Actions.

Dodd-Frank’s Whistleblower Provision Fails to Go Far Enough: Making the Case for a Qui Tam Provision in a Revised Foreign Corrupt Practices Act

Nathaniel Garrett, a student at the University of Cincinnati College of Law, recently published the above article in the University of Cincinnati Law Review.

The abstract is as follows.

“In the wake of the 2008 financial collapse, Congress enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd–Frank). Included within Dodd–Frank is a whistleblower provision that some businesses believe has gone too far. While Dodd–Frank’s reach is substantial, the whistleblower provision actually fails to go far enough as applied to the Foreign Corrupt Practices Act (FCPA). There are numerous statutory roadblocks and administrative hindrances that will prevent Dodd–Frank’s whistleblower provision from assisting in the enforcement of the FCPA. The solution I argue in this Comment is for Congress to amend the FCPA to include a qui tam provision, modeled after that found in the False Claims Act.”

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