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A Further Reminder That The FCPA Has Always Been A Law Much Broader Than Its Name Suggests

Surgalign

This type of post has been published several times before (see here and here among other posts), and once again today, to highlight an important (yet often overlooked) aspect of the Foreign Corrupt Practices Act: the FCPA has always been a law much broader than its name suggests.

Sure, the FCPA contains anti-bribery provisions which concern foreign bribery. Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.

However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery. For lack of a better term, let’s call these numerous enforcement actions non-FCPA, FCPA enforcement actions.

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It Makes No Sense

No Sense

There are some topics in the Foreign Corrupt Practices Act space that are covered ad nauseam. Yearly enforcement statistics come to mind as well as the odd practice of “media” covering law firm client alerts as if they are news.

Then, there are other topics in the FCPA space that receive little coverage. In this later category are FCPA enforcement actions (that is those involving FCPA books and records and internal controls charges) that do not necessarily involve foreign bribery.

These pages have long focused on so-called non-FCPA FCPA enforcement actions because they often present a perplexing issue. That is, the same legal violation is generally enforced in different ways.

It’s as if speeding tickets in the same jurisdiction involving a blue car are handled differently than a speeding ticket involving a red car.

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The Latest Reminder That The FCPA Has Always Been A Law Much Broader Than Its Name Suggests

reminder

The Foreign Corrupt Practices Act  has always been a law much broader than its name suggests. Sure, the FCPA contains anti-bribery provisions which concern foreign bribery. Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.

However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery and these provisions are among the most generic legal provisions one can possibly find.

The latest example is this recent SEC enforcement action against Synchronoss Technologies, Inc. (SNCR) and seven senior employees, including the former CFO, in connection with their roles related to long-running accounting improprieties.

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A Further Reminder That The FCPA Has Always Been A Law Much Broader Than Its Name Suggests

Orkin

This type of post has been published several times before (see here and here among other posts), and once again today, to highlight an important (yet often overlooked) aspect of the Foreign Corrupt Practices Act: the FCPA has always been a law much broader than its name suggests.

Sure, the FCPA contains anti-bribery provisions which concern foreign bribery. Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.

However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery. For lack of a better term, let’s call these numerous enforcement actions non-FCPA, FCPA enforcement actions.

The latest example is this recent SEC enforcement action against Rollins Inc. (an Atlanta based company that provides termite and other pest control services to residential and commercial customers including through such brands as Orkin) and Paul Northern (the company’s for CFO) for engaging “in improper accounting practices in order to boost its publicly-reported quarterly earnings per share (EPS) to meet research analysts’ consensus estimates.”

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The Kraft Heinz Company Resolves, Among Other Things, A Books and Records And Internal Controls Matter

KraftHeinz

There has been only two “traditional” (that is involving foreign bribery) corporate Foreign Corrupt Practices Act enforcement actions thus far in 2021.

However, there have been several other FCPA enforcement actions.

Confused?

Don’t be, just realize that the FCPA has always been a law much broader than its name suggests and the FCPA’s books and records and internal controls provisions (among the most generic legal provisions one can possibility find) can be implicated in a variety of circumstances that have nothing to do with foreign bribery.

The latest example to demonstrate this point is last week’s announcement by the SEC of a $62 million enforcement action against The Kraft Heinz Company for “a long-running expense management scheme that resulted in the restatement of several years of financial reporting.”

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