Foreign Corrupt Practices Act settlement amounts are one obvious consequence of FCPA non-compliance and tend to generate the most headlines. However, as has been discussed on these pages for years including in this article titled “FCPA Ripples”, settlement amounts tend to be a relatively modest consequence of the overall financial ramifications of FCPA scrutiny and enforcement.
Pre-enforcement action professional fees and expenses are often 3-5 times (and sometimes higher) the actual FCPA settlement amount and post-enforcement action professional fees and expenses quickly add up as well. In addition, many instances of FCPA scrutiny and enforcement result in shareholder litigation – whether a derivative action against officers and directors for alleged breaches of fiduciary duty and/or a securities fraud action.
And then there can be numerous other business effects as the below example concerning Vitol demonstrates.