For many years, financial institutions had not been frequent targets of FCPA enforcement. However, the past two years have revealed that regulators have not forgotten about this industry. The financial crisis increased regulatory scrutiny both from an investigative and a legislative perspective. The SEC and DOJ are investigating financial institutions for violations of securities laws, the FCPA, anti-money laundering rules, and similar regulations. As discussed in this article, and as the various reviews by regulators reveal, banks, private equity firms, and other financial institutions face several avenues of potential liability due to the nature of their overseas business under a myriad of domestic and international statutes. To properly navigate this complex regulatory framework requires an effective and regularly updated compliance program, consistent with the recommended government standards (and perhaps building off of their current anti-money laundering procedures), and any responses to regulatory requests demand a carefully structured internal review. In a guest article, Palmina Fava and Alan Brudner, both partners at Paul Hastings LLP, and Mor Wetzler, an associate at Paul Hastings, discuss: the regulatory focus on financial firms; guidance for anti-corruption compliance derived from anti-money laundering initiatives; the potential for anti-corruption liability without actual knowledge of the relevant corruption; the strict liability provisions of the U.K. Bribery Act; common sources of liability for financial institutions; specific compliance considerations raised by dealings with sovereign wealth funds and state-owned enterprises; and the risk of required offset funds.
Senior Editor Megan Zwiebel recently appeared on a podcast with Perkins Coie White Collar & Investigations partners Gina LaMonica and Caryn Trombino, who discussed the use of AI in compliance programs, including trends in AI-based compliance, steps companies can take to utilize AI in their compliance programs, and how regulators view the use of data and AI in compliance programs. Listen to the podcast here.
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