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. For lack of a better term, these enforcement actions have longed been called non-FCPA, FCPA enforcement actions by this site.
The latest examples concern Portland General Electric Co. and Circor International.
Portland General Electric Co.
This administrative order finds in summary fashion:
“These proceedings arise from the failure of Portland General Electric Company, a publicly-traded regional utility company based in Oregon, to devise and maintain a system of internal accounting controls sufficient to reasonably assure that Respondent’s derivatives and regulatory accounting transactions were recorded as necessary to permit preparation of its financial statements in conformity with U.S. Generally Accepted Accounting Principles (“GAAP”) or to maintain accountability for its assets. Relatedly, Respondent’s books and records did not accurately and fairly reflect its regulatory assets. Respondent also lacked disclosure controls and procedures to ensure that information required to be disclosed by Regulation S-K was captured and assessed by management and disclosure personnel.”
Based on the above, the order found that the company violated, among other things, the FCPA’s books and records and internal controls provisions.
Without admitting or denying the SEC’s findings, the company agreed to cease and desist from any future violations.
Circor International
This administrative order finds in summary fashion:
“This matter involves financial reporting, books and records, and internal accounting controls failures by CIRCOR, a Massachusetts-based formerly publicly traded company. Between 2019 and 2021, CIRCOR failed to devise and maintain a sufficient system of internal accounting controls, which, in turn, permitted a former finance director at a United Kingdom-based subsidiary to manipulate CIRCOR’s books and records by artificially inflating its net assets and operating income by millions of dollars. CIRCOR’s management failed to detect the former finance director’s misconduct for several years because of the company’s deficient control environment. During that time, CIRCOR filed numerous materially misstated financial statements with the Commission that were included in various periodic reports.”
Based on the above, the order found that the company violated, among other things, the FCPA’s books and records and internal controls provisions.
Without admitting or denying the SEC’s findings, the company agreed to cease and desist from any future violations.
