FCPA Guidance to be Released by Department of Justice


Guest Post by David Quinones, Executive Director, International Association for Asset Recovery

While it was just a brief comment during a lengthy speech, United States Assistant Attorney General Lanny Breuer’s mention of impending guidance on the resurgent Foreign Corrupt Practices Act (FCPA) from the Justice Department

Amendments made to the 1977 Act in 1988 said that consultations between regulators, department heads and legislators should be held to devise guidance and ensure “the business community would be assisted by further clarification.” But the clarification never came. Starting in 2009, FCPA enforcement increased in size and scope, and businesses snared in controversy over what had been business-as-usual chirped that the goal posts had moved. Continue reading

Michael Volkov on Internal Investigations: Best Practices


Guest Post by Michael Volkov

In-House counsel and corporate compliance officers dodge bullets everyday as they stare down the barrels of aggressive prosecutors, regulators, civil litigants, whistleblowers, disgruntled employees and shareholders prodded by trial attorneys to file derivative suits at the drop of a hat. In the face of all of these risks, internal investigations have become commonplace and a standard defensive tactic for a company to regain some leverage, learn the scope of a potential problem and then develop a plan for resolving a particular issue.

All too often, companies follow the rote formula developed in the Sarbanes-Oxley era of the early 2000s. Those same formulas are being applied in the Foreign Corrupt Practices Act, and in more discrete global anti-corruption, money laundering, export compliance and antitrust enforcement matters. Continue reading

Dodd-Frank Whistleblower Rule Adopted by SEC Discourages Internal Reporting


The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, established a whistleblower incentive program requiring the Securities and Exchange commission to provide monetary awards to whistleblowers who come forward with information about the violation of federal securities laws, including violations of the Foreign Corrupt Practices Act (FCPA). The Act also prohibits employers from retaliating against those who provide information about securities violations.

The reward for providing information that leads to a successful enforcement action by the SEC which results in monetary sanctions over $1,000,000 can be 10% to 30% of the penalty paid. Continue reading

FCPA Books and Records Violations: The Government Will Always Win.


The Foreign Corrupt Practices Act (FCPA) is aimed at preventing bribery of foreign officials. One key part of the FCPA is the books and records provision, which includes the following from 15 U.S.C. § 78m:

(2) Every issuer which has a class of securities registered pursuant to section 78l of this title and every issuer which is required to file reports pursuant to section 78o (d) of this title shall—

(A) make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer; Continue reading

Books and Records Control Person and FCPA Enforcement


I’ve recently been looking more closely at the Foreign Corrupt Practices Act (FCPA) as I consider the types of services companies will need from independent forensic accountants. This is an area in which government enforcement is skyrocketing, and so there are lots of opportunities for me to work with companies that need investigations or ongoing compliance work.

There are significant problems with FCPA enforcement, and Mike Koehler does an excellent job of discussing the issues in his paper, The Facade of FCPA Enforcement. He makes the case that the enforcement activities are not transparent and not tested legally. He says: Continue reading

Learn From the Costly FCPA Mistakes of Others


A recent Compliance Week article, An Expensive Lesson on FCPA Compliance [subscription required], provides some valuable insights on the direction that our government is taking with enforcement. Foreign Corrupt Practices Act violations are a huge focus of the feds right now. Why? Because there are plenty of violations, there is pressure on the SEC to enforce laws of some sort, and there is money to be made in fining the violators.

According to Richard Kassin at The FCPA Blog: Continue reading

The Case for Independent Internal Investigations


The United States Sentencing Guidelines (USSG) continue to make life tough for those in charge of corporate compliance and ethics. Corporate attorneys, both in-house and outside counsel, must ensure that companies are following protocols set for by the USSG. Rightfully, companies focus first on profits. But where does that leave the issues of compliance and ethics?

Although the creation and maintenance of a proper compliance program is secondary to core business pursuits, wise managers and executives know how critical it is to obtain specialized outside counsel to conduct internal investigations. Continue reading