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 example concerns an SEC enforcement action against former executives and/or directors of iSun, Inc. (formerly a solar energy company based in Vermont whose stock was publicly traded).
In summary fashion, this administrative order finds:
“From approximately May 2020 until June 2022, Jeffrey Peck (former CEO and Chairman of the Board) John Sullivan (former CFO) and Frederick Myrick (former Executive Vice President and a Director) … paid themselves a total of approximately $127,300 using corporate funds, which in part included proceeds from a Paycheck Protection Program (“PPP”) loan, by creating fictitious employment records to add their spouses to the company payroll. The PPP was a federal loan program established during the COVID-19 pandemic to provide economic relief to small businesses.
In so doing, the Respondents defrauded iSun and its investors and made material misstatements to investors regarding the PPP loan, iSun’s financial condition, and their executive compensation. Myrick negligently participated in the securities fraud. To obtain the funds, the Respondents falsified iSun’s records and circumvented iSun’s inadequate internal accounting controls. The Respondents also caused iSun to violate federal securities laws that govern public companies’ maintenance of accurate books and records and obligation to file accurate reports with the Commission. In addition, Peck and Sullivan made material misrepresentations to iSun’s external auditors, executed false certifications in iSun’s Commission filings, and caused iSun to violate its obligation to implement a system of internal accounting controls.”
Peck agreed to pay approximately $213,000 in disgorgement, prejudgment interest and a civil penalty; Sullivan approximately $149,000; and Myrick $101,000.
According to the order, “iSun is no longer an active company and its assets have been fully liquidated through bankruptcy.”
