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Potpourri

Potpourri

FCPA Whistleblower Bounty?

The SEC recently announced “an award of over $5 million to joint whistleblowers whose tip caused the opening of an investigation that resulted in a successful enforcement action.” According to the SEC,  “the whistleblowers provided significant information about misconduct abroad that directly supported certain allegations in the enforcement action.”

The accompanying order is heavily redacted, but does mention that the underlying enforcement action “involved misconduct abroad” and was resolved through an administrative proceeding.

My guess is that the underlying action was likely an FCPA enforcement action. If true, this would be rare instance of a bounty being paid out in connection with an FCPA enforcement action.

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Observations From The OECD’s Phase 4 U.S. Review Report

oecd

Recently, the OECD released its Phase 4 review of the United State’s implementation of the OECD Anti-Bribery Convention … in effect a review of the FCPA, its enforcement, and related issues.

The first question one needs to ask themselves is whether they care what “experts from Argentina and the United Kingdom” (as stated by the OECD “the report and its recommendations reflect the findings of experts from Argentina and the United Kingdom”) think about the U.S. Foreign Corrupt Practices Act, U.S. law enforcement (DOJ and SEC) policies and practices, and U.S. jurisprudence.

In any event, the Phase 4 Report “explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports.” (See here for a 2010 post summarizing the OECD’s Phase 3 review).

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The Biggest Loser In The Beam Enforcement Action Is FCPA Enforcement

biggestloser

For years, the DOJ has encouraged business organizations to voluntarily disclose Foreign Corrupt Practices Act issues.

For years, the DOJ has talked about transparency, consistency and predictability when it comes to FCPA enforcement. For instance, as highlighted in this prior post, in 2018 the DOJ’s Principal Deputy Assistant Attorney General gave a speech in which he stated that the DOJ recognizes “the need for better defined ‘rules of the road’ in corporate enforcement” and that the DOJ “has taken affirmative steps to make our prevailing ‘rules of the road’ as plain and predictable as possible.” Numerous other DOJ speeches or policy statements could also be cited.

This post highlighted the DOJ’s recent $19.6 million enforcement action against Beam Suntory – a highly unusual development given that the SEC previously brought a related enforcement action against the company approximately 2.5 years ago concerning the same core conduct. As highlighted in the prior post and below, several other aspects of the DOJ enforcement action were also unusual.

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Survey Says …

Survey Results

The OECD recently released this study titled “Corporate Anti-corruption Compliance Drivers, Mechanisms and Ideas for Change.” The study largely relies on results of a survey “to better understand the extent to which companies are currently motivated to take measures to prevent and detect bribery and other forms of corruption in their business dealings.”

The survey size was very small (only 130 survey respondents – largely individuals in a legal or compliance role in their companies – with the U.S. having the most respondents – with the largest number of respondents in the healthcare industry). As a result the survey was not representative as even the report recognized: “a company that does not have a compliance program probably would not have an interest in participating in a study of such program – thus it is important to remember that the percentage of respondents who indicated that their companies have such a program is not at all indicative of the percentage of overall companies in the world that have such programs.”

Even as to this survey group, as highlighted below several survey responses caught my eye and call into question whether “soft” enforcement of the FCPA (and related laws) has been successful (see here for the article “Has the FCPA Been Successful in Achieving Its Objectives”) or whether compliance can best be incentivized with a compliance defense (see here for the article “Revisiting an FCPA Compliance Defense”).

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Issues To Consider From The Sargeant Marine Enforcement Action

Issues

This prior post went in-depth into the recent Foreign Corrupt Practices Act enforcement action against Sargeant Marine Inc. (SMI) and this post continues the analysis by highlighting additional issues to consider.

Why Disclose?

For approximately 15 years, the DOJ has been encouraging business organizations to voluntarily disclose FCPA violations. Yet, time and time again, the DOJ undermines its goal by how it resolves certain enforcement actions.

The SMI matter is the latest example that should cause a board member, audit committee member or others involved in the voluntary disclosure decision to pause.

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