The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Self-Reporting

  • From Vol. 7 No.25 (Dec. 12, 2018)

    Weak Internal Controls Land Vantage Drilling $5M Petrobras-Related Settlement

    Vantage Drilling International has settled charges with the SEC that it failed to implement appropriate internal controls in its transactions with an independent director and a Brazilian agent. The SEC alleged that the agent and director paid bribes to a Petrobras official in 2009 and 2010 – bribes that were initially brought to light by Brazilian investigators. The DOJ declined to prosecute in 2017 and the SEC agreed to a reduced fine in light of Vantage’s financial condition, and perhaps other factors. We analyze the case and the compliance takeaways. See our three-part series on the Petrobras settlement: “Deal With SEC and DOJ to Resolve Allegations of Systemic Bribery” (Oct. 17, 2018); “State-Owned Entity, Victim and Perpetrator” (Oct. 31, 2018); and “Lessons on Preventing Top-Down Corruption” (Nov. 14, 2018).

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  • From Vol. 7 No.20 (Oct. 3, 2018)

    How Much Golf Is Too Much Golf? Lessons From the UTC SEC Settlement

    United Technologies Corporation, a building systems and aerospace conglomerate, recently settled bribery issues with the SEC after the DOJ declined to prosecute. Despite media reports of the corruption that pre-dated the company’s report to the government, the company won full credit for self-disclosure and cooperation from U.S. authorities and paid a total of just under $14 million. The case illustrates the value of being forthright with the government and offers lessons about what makes entertainment expenses pass SEC muster. See our two-part series on how to answer the question “There’s a problem, now what?”: “Philip Urofsky of Shearman Explains the Logistics of Self-Reporting” (Sep. 14, 2016); and “Richard Smith of Quinn Emanuel Discusses Framing Voluntary Disclosure to Minimize Cost and Maximize Credit” (Mar. 15, 2017).

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  • From Vol. 7 No.10 (May 16, 2018)

    How Significant Is the DOJ’s New Directive on Coordination?

    In what he described as “another step towards greater transparency and consistency in corporate enforcement,” Deputy Attorney General Rod Rosenstein recently announced a new DOJ policy designed to reduce “disproportionate enforcement of corruption laws by multiple authorities.” When bringing corporate cases, “the Department,” Rosenstein stated in a memo distributing the policy, “should consider the totality of fines, penalties, and/or forfeiture imposed by all Department components as well as other law enforcement agencies and regulators in an effort to achieve an equitable result.” The Anti-Corruption Report spoke with former DOJ prosecutors about the impact the new policy will have on anti-corruption enforcement. See our three-part series on the DOJ’s FCPA Corporate Enforcement Policy: “What’s New and What’s Not” (Jan. 10, 2018); “How Important Is the Presumption of Declination?” (Jan. 24, 2018); and “Cooperation and Compliance Expectations” (Feb. 7, 2018).

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  • From Vol. 7 No.7 (Apr. 4, 2018)

    What to Consider When Deciding Whether to Self-Disclose: An Interview With Steptoe’s Lucinda Low

    The laundry list of variables affecting a decision to self-report seems almost endless. Considerations about whistleblowers, pressure from auditors worried about their own liability, the prospect of multijurisdictional investigations, the likelihood of collateral consequences and even the sometimes elusive benefits of self-disclosure all factor into the mix. The Anti-Corruption Report spoke with Lucinda Low, a partner at Steptoe, about the self-reporting calculus – from the basics of disclosure to nuances that may be experienced in any particular set of circumstances. Excerpts from the interview follow. See also “Former DOJ Prosecutors Weigh In on Self-Reporting, Individual Prosecutions, International Cooperation and Enforcement Tactics” (Nov. 4, 2015).

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  • From Vol. 7 No.3 (Feb. 7, 2018)

    DOJ’s FCPA Corporate Enforcement Policy: Cooperation and Compliance Expectations (Part Three of Three)

    Following the announcement of the DOJ’s new FCPA Corporate Enforcement Policy (the Policy) late last year, the focus was on the incentives it offered companies to self-report anti-corruption issues. The Policy, however, also contains important clarifications on what the DOJ expects from companies in terms of cooperation and compliance program remediation. In this final article in a three-part series on the DOJ’s new Policy, we look at the new guidance the DOJ has provided on de-confliction, compliance authority and document retention. See “Using the FCPA Pilot Program’s Remediation Requirements to Build a Best-in-Class Compliance Program” (May 18, 2016).

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  • From Vol. 7 No.3 (Feb. 7, 2018)

    Voluntary Disclosure in FCPA Cases: Persistent Problems and New Challenges

    The DOJ continues to promote the voluntary disclosure of FCPA issues and claims that its policies – notably the Pilot Program issued in April 2016 and recently revised and added to the U.S. Attorneys’ Manual as the FCPA Corporate Enforcement Policy – have led to an increase in voluntary disclosures. In a guest article, Baker & Mackenzie partner Richard Dean discusses the factors companies must weigh when evaluating whether to self-disclose a potential FCPA violation. See “DOJ’s FCPA Corporate Enforcement Policy: What’s New and What’s Not (Part One of Three)” (Jan. 10, 2018); Part Two (Jan. 24, 2018); Part Three (Feb. 7, 2018).

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  • From Vol. 7 No.2 (Jan. 24, 2018)

    DOJ’s FCPA Corporate Enforcement Policy: How Important Is the Presumption of Declination? (Part Two of Three)

    For the most part, the DOJ’s new FCPA Corporate Enforcement Policy was a codification of the Pilot Program it announced in 2016, but there were a few significant changes that may – or may not – change the criminal FCPA enforcement landscape. Perhaps the biggest and most important change is the new presumption that a company that self-reports an anti-corruption issue will receive a declination. However, there are exceptions to that presumption that preserve prosecutorial discretion, leaving some practitioners wondering whether this is really a change at all. In this second article in a three-part series, we discuss the implications of the presumption of declination. See “DOJ’s FCPA Corporate Enforcement Policy: What’s New and What’s Not (Part One of Three)” (Jan. 10, 2018).

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  • From Vol. 7 No.1 (Jan. 10, 2018)

    DOJ’s FCPA Corporate Enforcement Policy: What’s New and What’s Not (Part One of Three)

    Many of the elements of the DOJ’s FCPA Pilot Program have now been codified in the U.S. Attorney’s Manual, Deputy Attorney General Rod Rosenstein said during a speech at ACI’s 34th Annual International Conference on the Foreign Corrupt Practices Act. However, the new DOJ FCPA Corporate Enforcement Policy also includes some significant changes and enhancements to the Pilot Program. The Anti-Corruption Report spoke with various FCPA counsel to take a close look at what has changed, what has not and what companies should expect from DOJ enforcement going forward in this three-part article series. See our series on the Fraud Section’s Pilot Program:  “Going Deep” (Apr. 20, 2016); “How Will the Program Change Voluntary Self-Reporting?” (May 4, 2016); and “Earning Cooperation Credit” (May 18, 2016).

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  • From Vol. 6 No.22 (Nov. 15, 2017)

    Broken Windows, Admissions and Stale Conduct: The State of Enforcement at the SEC

    Recent comments by top SEC enforcement officials point to a potential shift away from previous approaches, such as “broken windows” and requiring admissions in certain cases. At the same time, the SEC, operating under budget constraints that will reduce personnel, promoted Charles Cain, a member of the FCPA Unit since its formation, to head the unit. Cain’s hire “signals that FCPA is going to continue to be a priority and that the SEC is going to continue the program the way that it’s been going,” Kara Brockmeyer, a partner at Debevoise and Cain’s predecessor as the head of the FCPA Unit, told The Anti-Corruption Report. She and other former SEC officials discussed the direction of SEC enforcement, including how the budget constraints and the recent Kokesh decision may affect the cases the SEC pursues. See also “SEC and DOJ Address Corporate Concerns About Future FCPA Enforcement” (Jun. 7, 2017).

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  • From Vol. 6 No.18 (Sep. 20, 2017)

    Top SEC Officials Put Mr. and Ms. 401K at the Forefront but Say No Big Changes to Enforcement to Come

    As we move deeper into the Trump administration with few settlements and enforcement actions to indicate what our new regulators are thinking, public statements from enforcement officials are becoming increasingly relevant. At a recent event co-hosted by the Institute for Corporate Governance and Finance, the Program on Corporate Compliance and Enforcement and the Pollack Center for Law & Business at the New York University School of Law, SEC Chair Jay Clayton, along with Stephanie Avakian and Steven Peikin, Co-Directors of the SEC Division of Enforcement, gave some insights on what SEC enforcement may look like going forward. See “DOJ Reiterates Commitment to FCPA Enforcement but Resources May Become an Issue” (Jul. 19, 2017).

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  • From Vol. 6 No.5 (Mar. 15, 2017)

    There’s a Problem, Now What? Richard Smith of Quinn Emanuel Discusses Framing Voluntary Disclosure to Minimize Cost and Maximize Credit 

    Once a company has made the difficult decision to report possible corruption to authorities, it is faced with several questions. When should that call be made? To which agency should it report? What should it be doing in terms of investigation and remediation in the meantime? Richard Smith, a partner at Quinn Emanuel and former prosecutor, recently discussed this difficult moment for companies with The FCPA Report, and offered suggestions on how companies can limit the scope of their investigation and gain maximum cooperation credit. See “There’s a Problem, Now What? Philip Urofsky of Shearman Explains the Logistics of Self-Reporting” (Sep. 14, 2016).

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  • From Vol. 6 No.1 (Jan. 18, 2017)

    Jay Holtmeier of WilmerHale Discusses What’s to Come After a Blockbuster Year of FCPA Enforcement

    By the numbers, 2016 was an epic year for FCPA enforcement, witnessing more than 50 settlements with corporate fines exceeding $2 billion. Those numbers were not the only notable aspect of enforcement, as both the SEC and DOJ placed greater emphasis on compliance programs and cooperation with foreign authorities. The future of FCPA enforcement, however, is in flux with the beginning of a new administration. The FCPA Report recently spoke with Jay Holtmeier, a partner at WilmerHale, to discuss the changes 2016 brought and what we can expect in 2017 and beyond. On February 1, 2017, Holtmeier will be chairing a full-day CLE program on the FCPA hosted by Strafford in New York City and online. A 50 percent event discount code is available for FCPAR subscribers inside this article. For previous insights from Holtmeier, see “Regional Risk Spotlight: Jay Holtmeier of WilmerHale Explains How to Navigate Bureaucratic Corruption Risks in India” (Sep. 23, 2015).

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  • From Vol. 5 No.24 (Dec. 7, 2016)

    Ceresney and Yates Continue to Stress Individual Accountability, Voluntary Reporting and Cooperation

    Individual accountability is “a core value of our criminal justice system that perseveres regardless of which party is in power,” Deputy Attorney General Sally Q. Yates said at ACI’s recent FCPA conference, adding that she therefore expects the DOJ’s focus on individual accountability to continue into President-Elect Trump’s administration. She and Andrew J. Ceresney, the Director of the SEC Division of Enforcement, each delivered keynote addresses at the conference, emphasizing the DOJ and SEC’s focus on individual accountability and reiterating the now-familiar theme of the benefits of voluntary disclosure and cooperation. They spoke on the growing trend of international cooperation and what to expect from the new administration when it comes to anti-corruption enforcement. See “Yates on the Yates Memo” (May 18, 2016).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    DOJ and SEC Continue to Stress the “Holy Trinity of Self-Disclosure, Cooperation and Remediation 

    Big cases, lengthy investigations and robust enforcement of the FCPA are the hallmarks of 2016, noted commentators at a recent Practicing Law Institute panel on FCPA developments. “This was a very good year for SEC FCPA enforcement,” said Neil Smith, Senior Counsel with the SEC Division of Enforcement. Expanded enforcement can be chalked up to a committed workforce, good relations between the SEC and DOJ and “strong partnerships overseas where we continue to leverage our contacts with foreign regulators, foreign criminal authorities and other folks to bring about enforcement,” he said. According to James Loonam, Deputy Chief of the Business and Securities Fraud Section of the U.S. Attorney’s Office in the Eastern District of New York, DOJ enforcement also remains strong. See “Top FCPA Enforcers Discuss Evolving and Diverging Enforcement Approaches and the Defense Bar Responds” (Dec. 2, 2015).

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    What Compliance Lessons Can Companies Learn From the SFO’s First Two DPAs?

    In July 2016, the U.K.’s Serious Fraud Office received court approval for its second-ever DPA. Both this DPA and the one before it, involving Standard Bank, are stark demonstrations of the fact that violating the U.K. Bribery Act can have serious and expensive ramifications not only for the offending company but also for others in its corporate group, even if they were unaware of the bribery. They also serve as another reminder of the dangers of using agents to win business. In a guest article, Matthew Getz and Prateek Swaika, partner and associate, respectively, at Boies, Schiller & Flexner, consider some of the lessons to be learned in this context, and what companies operating in the U.K. should do to avoid incurring liability when using agents to enter into contracts. See also “In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance” (Aug. 31, 2016).

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    There’s a Problem, Now What? Philip Urofsky of Shearman Explains the Logistics of Self-Reporting

    Making the decision to self-report can be agonizing, as can a government investigation. But what happens in the interim? Once a company has identified an anti-corruption issue, conducted a preliminary investigation and determined that alerting the authorities may be prudent, how should it go about actually self-reporting? In a recent conversation, Philip Urofsky, a partner at Shearman & Sterling, walked us through the steps of self-reporting and discussed several ways companies can make the process as painless as possible. See “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (Part Two of Three) (May 4, 2016).

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  • From Vol. 5 No.17 (Aug. 31, 2016)

    In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance

    Recently a U.K. court approved the second Serious Fraud Office application for a DPA. The identity of the counterparty remains confidential but is understood to be a small to medium-sized U.K. entity wholly owned by a U.S. corporation. The first DPA which was approved by the same judge in November 2015, was with Standard Bank, a regulated institution that settled for what could be perceived as a more stringent penalty. More recently, financially troubled Sweett Group was prosecuted after failing to cooperate in the SFO’s investigation. In a guest article, Elizabeth Robertson, a partner at Skadden located in London, discusses the key features of the most recent DPA and examines the differences between it, the Standard Bank case and the Sweett Group case offering insights on anti-corruption enforcement in the U.K. See “Lessons From the U.K. Sweett Group Prosecution” (Mar. 23, 2016).

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  • From Vol. 5 No.16 (Aug. 10, 2016)

    LATAM’s Delayed Self-Report and Inadequate Remediation Result in FCPA Fine Above Sentencing Guideline Minimum

    LATAM Airlines Group, along with its predecessor-in-interest LAN Airlines, has agreed to pay more than $22 million in penalties and disgorgement in order to settle allegations of books and records violations related to a union dispute in Argentina. Despite the lack of bribery allegations, the company paid a hefty penalty to the DOJ based on its failure to self-report the conduct in a timely manner or adequately remediate. Among the company’s remedial failures, the DOJ cited a lack of employee discipline, likely referencing the company’s CEO, who entered into a settlement with the SEC over the same conduct but remains in his position. See “CEO of LAN Airlines Settles FCPA Charges With SEC Over Union Dispute” (Feb. 10, 2016).

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  • From Vol. 5 No.15 (Jul. 27, 2016)

    Could Johnson Controls Have Prevented the Flagrant Circumvention of Its Revamped Compliance Program?

    Johnson Controls (JCI) has agreed to pay $14 million to resolve SEC charges that employees of its subsidiary China Marine undermined the company’s revamped internal controls systems to make payments to sham vendors. Nicholas Berg, a partner at Ropes & Gray, said that “the Chinese subsidiary’s employees appear to have engaged in a carefully orchestrated effort to evade those controls in a way that was extremely difficult to detect.” Notably, China Marine was being supervised by a monitor in connection with a prior FCPA settlement both at the time it was acquired by JCI and when the illicit actions occurred. The DOJ announced its decision not to prosecute by publicly releasing a letter it sent to JCI, the third such letter since the implementation of the Pilot Program. The settlement highlights compliance issues, including the proper design of risk-based controls and internal reporting incentives. It also raises enforcement questions such as how long a company can wait to self-report under the Pilot Program and whether the DOJ had a case against JCI. See “Using the FCPA Pilot Program’s Remediation Requirements to Build a Best-in-Class Compliance Program” (May 18, 2016).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    How Nortek and Akamai Escaped SEC and DOJ Prosecution for Chinese Bribery

    Nortek, a home security and ventilation manufacturer, and Akamai Technologies, a cloud services provider, have entered into non-prosecution agreements with the SEC in unrelated cases, after each company self-reported corruption at subsidiaries in China. Nortek will pay about $320,000 and Akamai will pay about $670,000 to resolve the matters. The DOJ also issued letters indicating that it will decline to prosecute both companies. Together with the NPAs, these declinations are widely seen as a signal from the government that self-reporting, cooperation and remediation can net a company more than just a penalty discount. We explore the settlements and what lies behind them. See The FCPA Report’s three-part series on the DOJ’s Pilot Program “Going Deep on the Fraud Section’s FCPA Pilot Program” (Apr. 20, 2016); “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (May 4, 2016); and “Earning Cooperation Credit Under the Fraud Section’s FCPA Pilot Program” (May 18, 2016).

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  • From Vol. 5 No.11 (Jun. 1, 2016)

    SEC’s Brockmeyer, DOJ’s Kahn Discuss Recent FCPA Enforcement Trends

    So far, 2016 has been an eventful year in FCPA enforcement. During a recent PLI panel, the SEC’s Kara N. Brockmeyer and the DOJ’s Daniel S. Kahn shared their perspectives on the DOJ pilot program, the Yates Memo, voluntary disclosures, individual accountability, cooperation among regulators, internal investigations and commercial bribery. The panel also featured insights on the enforcement climate from private practitioners Charles E. Duross and Lucinda A. Low. See also The FCPA Report’s three-part series on the pilot program: Part One (Apr. 20, 2016); Part Two (May 4, 2016); and Part Three (May 18, 2016).

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  • From Vol. 5 No.9 (May 4, 2016)

    How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting? (Part Two of Three)

    Over the last year, the DOJ has made a number of policy statements that make it abundantly clear that it wants companies’ help in identifying and prosecuting corruption. The Yates Memo and changes to the U.S. Attorneys’ Manual drove home the Department’s focus on prosecuting individuals. Its recent announcement of a pilot program, specific to the Fraud Section’s FCPA Unit, underlined the Department’s desire for companies to come forward and self-report FCPA violations. As discussed in the first article in this three-article series, while the program may not represent much of a change in enforcement, it was meant to increase transparency on how prosecution and settlement decisions are made within the FCPA Unit. However, several aspects of the program and the related guidance fail to clear up concerns companies have raised in the past and, in some instances, introduce greater confusion. The FCPA Report spoke with former DOJ prosecutors to get their insights on this uncertainty and how the pilot program might – or might not – change a company’s self-disclosure calculus. See “Ceresney and Caldwell Remarks Highlight New SEC Self-Reporting Policy, Cooperation, Remediation and Transparency” (Dec. 2, 2015).

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    Going Deep on the Fraud Section’s FCPA Pilot Program (Part One of Three)

    The DOJ recently announced several changes to criminal FCPA enforcement that could shake up the anti-corruption space. At a press conference, Leslie R. Caldwell, Assistant Attorney General of the DOJ Criminal Division, explained that the changes represented “enhancements to our FCPA prosecution program in the Fraud Section here at the Criminal Division.” In order to evaluate the impact of these changes, The FCPA Report spoke with five former DOJ prosecutors who offered extensive analysis on the implications for companies. In this first article in a three-article series about the DOJ’s announcement, we unpack what is happening at the Fraud Section and to what extent it represents a change from previous practice. The second article in the series will examine the areas of uncertainty that remain for companies and how those uncertainties might alter incentives to self-report. The final article will discuss how the Pilot Program might impact companies cooperating witht the DOJ during an investigation. See previously “How Will the Yates Memo Change DOJ Enforcement?” (Part One of Two) (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 5 No.5 (Mar. 9, 2016)

    Canadian Health Science Company and Employee Settle Civil FCPA Charges in Failed Quest for Drug Distribution in Russia

    Hiring the purported friend of a company employee to facilitate the distribution of a liver treatment drug in Russia is behind the SEC’s FCPA settlements with Nordion (Canada) Inc. and employee Mikhail Gourevitch. Gourevitch allegedly orchestrated a scheme for his “friend” to pay bribes to Russian officials to get the approval, hid the extra costs from the company and received a kickback. The SEC said weak internal controls at Nordion (the predecessor-in-interest to Nordion (Canada), which purchased Nordion during this investigation) allowed the scheme to go undetected, including payments to offshore bank accounts. Nordion ultimately was unable to distribute the drug and made no profits. See “Ten Steps A Company Can Take to Mitigate Corruption Risk When Entering a New Market (Part One of Two)” (Jun. 24, 2015); Part Two (Jul. 8, 2015).

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  • From Vol. 5 No.4 (Feb. 24, 2016)

    Excessive Power for Junior Employees and Lavish Trips for Foreign Officials Lead to $28 Million PTC Settlement

    PTC Inc., a Massachusetts-based software company, will pay more than $28 million to settle parallel civil and criminal FCPA charges. Like FLIR and SciClone, PTC’s corruption troubles stemmed from the provision of improper travel, gifts and entertainment to government officials. By inflating the fees paid to third parties for their services, junior employees of PTC’s China-based subsidiaries created pools of money that were then used to fund sightseeing adventures. Officials visited Honolulu, San Diego, New York and Las Vegas and enjoyed guided tours, golfing and other leisure activities. The SEC also announced its first DPA with an individual in an FCPA case, agreeing to defer prosecution against Yu Kai Yuan, a former employee of a PTC subsidiary, because of the significant cooperation he provided during the SEC investigation of the company. The voluntary disclosure calculus and how to handle relationships with lobbyists were among the key compliance concerns implicated in the PTC matter. See “CEO of LAN Airlines Settles FCPA Charges With SEC Over Union Dispute” (Feb. 10, 2016).

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  • From Vol. 5 No.2 (Jan. 27, 2016)

    Former Prosecutor Nat Edmonds Discusses the Implications of the Recent Changes to the U.S. Attorneys’ Manual (Part Two of Two)

    The DOJ recently announced that it had revised its U.S. Attorneys’ Manual (USAM) to reflect the Department’s efforts to hold more individuals accountable for corporate criminal activity. Although the new guidelines may not represent a significant change in policy, even subtle shifts in the USAM language may affect how a company approaches anti-corruption compliance, former prosecutor Nat Edmonds, now a partner at Paul Hastings, told The FCPA Report. We share Edmond’s insights in this two-part series. See “How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)” (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 4 No.26 (Dec. 16, 2015)

    Brockmeyer and Stokes Offer Four Benefits of Cooperation and Four Ways Companies Can Go Wrong in Their Internal Investigations

    As government enforcers become increasingly sophisticated about business practices and bribery – and adjust their strategies accordingly – companies can be left befuddled as to what is expected from them.  In our previous issue, The FCPA Report analyzed the DOJ and SEC’s changing approaches in detail based on the “Year in Review” panel at this year’s ACI FCPA conference.  During that panel Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC, and Patrick Stokes, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, also clarified their expectations for companies and their compliance programs.  The FCPA Report spoke to several anti-corruption defense experts to find out whether these expectations are reasonable and how companies can best meet them.  For coverage of last year’s panel, see “Top FCPA Enforcers Tout Voluntary Disclosure and Warn About International Cooperation; The Defense Bar Responds,” The FCPA Report, Vol. 3, No. 24 (Dec. 3, 2014); and “Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    Standard Bank Fined by Both the SEC and the SFO in a Coordinated Settlement Featuring the First British DPA 

    A court in London has approved the Serious Fraud Office’s first DPA in a case involving Standard Bank’s failure to prevent the bribery of Tanzanian officials.  The bank will pay $32.6 million in fines for alleged Bribery Act violations which allowed the bank to win a lucrative private placement deal.  The SEC announced a coordinated settlement fining Standard Bank $4.2 million for failing to disclose the same payments in violation of Section 17(a)(2) of the Securities Act.  Although there are many lessons to be learned from Standard Bank’s agreement, the matter is a “relatively small case” and the DPA is “an incredibly new animal” in the U.K., said Ryan Junck, a partner in Skadden’s London offices.  “Much of the story about when and how DPAs will be used is yet to be written,” he said.  See also “SFO Secures First Bribery Act Convictions,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    Ceresney and Caldwell Remarks Highlight New SEC Self-Reporting Policy, Cooperation, Remediation and Transparency

    The government’s keynote speeches at ACI’s recent FCPA Conference featured familiar tunes, but a few of the lyrics were new.  Andrew J. Ceresney, the Director of the SEC Division of Enforcement, and Leslie R. Caldwell, Assistant Attorney General of the DOJ Criminal Division, offered their views on their respective agency’s recent FCPA enforcement activity, focusing, as they usually do, on the benefits of self-reporting, cooperation and remediation by companies that discover misconduct.  Ceresney made an announcement about a new SEC policy regarding self-reporting and promised aggressive enforcement.  Meanwhile, Caldwell opined on the Yates memo and its effect on internal investigations and promised to continue increasing transparency.  For coverage of Ceresney and Caldwell’s speeches during the 2014 ACI program see “Caldwell and Ceresney Push Companies on FCPA Compliance, Cooperation and Self-Reporting,” The FCPA Report, Vol. 3, No. 24 (Dec. 3, 2014).

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  • From Vol. 4 No.23 (Nov. 4, 2015)

    Former DOJ Prosecutors Weigh In on Self-Reporting, Individual Prosecutions, International Cooperation and Enforcement Tactics

    Two former FCPA prosecutors who have moved to the other side of the table recently offered their candid views from the trenches of FCPA enforcement.  They discussed hot topics including whether the DOJ is targeting foreign companies, how international cooperation affects enforcement and how effective the government really is at evaluating compliance programs.  The former prosecutors also opined on the voluntary disclosure calculus, whether the Yates memo will increase individual prosecutions, how companies should “follow the money” to strengthen internal controls, and more.  The panelists, Nathaniel Edmonds, now a partner at Paul Hastings, and Stephen Spiegelhalter, now a principal in the Fraud Investigations & Dispute Services practice at EY, spoke during a panel at the recent SCCE Compliance and Ethics Institute in Las Vegas.

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    How Will the Yates Memo Change DOJ Enforcement? (Part Two of Two)

    Last month, Deputy Attorney General Sally Quillian Yates issued a memo to all United States Attorneys outlining “six key steps” designed to strengthen the DOJ’s “pursuit of individual corporate wrongdoing.”  The FCPA Report spoke to three former DOJ attorneys about how the Yates Memo may affect companies and their compliance programs.  The first article in this two-part series assessed how much of a policy shift the Yates Memo truly represents and how it may affect a target’s decision to cooperate with the government.  This second article focuses on two other major issues raised by the Memo: (1) the directive to gather information about individual culpability earlier and (2) a possible increase in the number of civil actions brought against individuals.  It also discusses whether companies should reconsider their internal investigation procedures. See also “FCPA Enforcement Officials and Defense Bar Debate FCPA Policy,” The FCPA Report, Vol. 4, No. 12 (Jun. 10, 2015).

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  • From Vol. 4 No.17 (Aug. 19, 2015)

    James Tillen of Miller & Chevalier Talks 2015 Enforcement Trends and Predictions

    The first half of 2015 is behind us, providing an opportunity to reflect on new trends in anti-corruption enforcement and what companies can expect going forward.  A number of FCPA actions have made the news this year, but identifying trends and making predictions requires a more careful look at the numbers.  As part of its FCPA Summer Review 2015, Miller & Chevalier has analyzed enforcement data and identified several trends in the first half of 2015, including a noticeable increase in the number of declinations by the DOJ.  The FCPA Report spoke with James Tillen, a member of M&C and vice chair of the firm’s international department, about these trends, how companies should use them to improve their compliance programs and their negotiating strategies with the government and his predictions for the second half of 2015.  See also “Government Officials and Defense Bar Offer Insights on FCPA Enforcement, Voluntary Disclosure and Cooperation,” The FCPA Report, Vol. 4, No. 14 (Jul. 8, 2015).

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  • From Vol. 4 No.15 (Jul. 22, 2015)

    PetroTiger’s Counsel Reveals the Defense Strategy That Led to a DOJ Declination

    Three of the company’s senior managers were involved in the bribery scheme, including the CEO (who pled guilty during his trial on June 15), and yet the DOJ declined to prosecute PetroTiger for FCPA violations – its first public declination since Morgan Stanley.  The case is a source of hope for companies with FCPA issues, Timothy Treanor told The FCPA Report.  Treanor, a partner at Sidley Austin who negotiated with the government on behalf of PetroTiger, discussed why he and his team were able to achieve such a favorable result and convince the government that this was indeed the case of a “rogue CEO.”  Treanor emphasized that he thinks the FCPA bar can get further with the government than it may expect, and discussed the self-reporting calculation, the struggle to operate a business during the government investigation, strategies for the negotiation, and more.  See also “Comparing and Contrasting Three FCPA Experts’ Advice on Negotiating FCPA Settlements,” The FCPA Report, Vol. 3, No. 17 (Aug. 20, 2014).

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  • From Vol. 4 No.14 (Jul. 8, 2015)

    Government Officials and Defense Bar Offer Insights on FCPA Enforcement, Voluntary Disclosure and Cooperation

    Companies should anticipate that the government will continue to reward self-reporting and cooperation, and that the SEC will routinely seek disgorgement, even when a company self-discloses, enforcement officials said at the Securities Enforcement Forum West 2015.  Along with members of the FCPA defense bar, they discussed the trajectory of FCPA enforcement and offered advice on how companies can receive the most cooperation credit possible.  See also “FCPA Enforcement Officials and Defense Bar Debate FCPA Policy,” The FCPA Report, Vol. 4, No. 12 (Jun. 10, 2015).

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  • From Vol. 4 No.9 (Apr. 29, 2015)

    Top FCPA Officials Discuss Government Tactics and Lessons from Enforcement Actions

    At this year’s Momentum ACES Compliance Summit, high-ranking FCPA officials from the DOJ and SEC confirmed that active FCPA enforcement is continuing, and advised companies to read the public statements they release.  Tracy Price, Assistant Director of the SEC’s FCPA Unit, and Leo Tsao, Assistant Chief of the DOJ’s FCPA Unit also discussed cooperation, self-reporting and interagency collaboration. 

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  • From Vol. 4 No.8 (Apr. 15, 2015)

    $9.5 Million SEC FLIR Settlement Emphasizes Benefits of Self-Reporting and Importance of Internal Controls

    Employees often ask compliance officers about what is acceptable when entertaining or providing gifts to foreign officials.  How much is too much?  The FLIR fact pattern provides a clear case of “too much.”  Months after two of its employees had been sanctioned for the same behavior, FLIR Systems, Inc., an Oregon-based company that develops infrared technology, has resolved SEC charges that it took key officials of the Saudi Arabia Ministry of Interior on an extensive “world tour” and bought them luxury gifts.  “FLIR’s deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company’s dime,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.  Despite the extravagant travel and gifts, FLIR did escape a DOJ enforcement action.  We discuss the details and takeaways from the case.  See also “A Guide to Preventing and Detecting Travel Agency Corruption (Part One of Three),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014); Part Two of Three, Vol. 3, No. 2 (Jan. 22, 2014); Part Three of Three, Vol. 3, No. 3 (Feb. 5, 2014).

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  • From Vol. 4 No.7 (Apr. 1, 2015)

    From Princelings to SWFs: All-Star Panel Dissects Corruption Issues Affecting Wall Street

    For financial institutions and the private funds industry, corruption risks lurking in common activities are coming to the forefront.  At the New York City Bar, a distinguished panel of former prosecutors and industry experts offered insights into those evolving risks (including hiring practices and sovereign wealth funds), the enforcement landscape and how companies can strengthen their compliance programs in response.  The panel was moderated by John D. Buretta, a partner at Cravath, Swaine & Moore and former Assistant U.S. Attorney and Principal Deputy Assistant Attorney General at the DOJ.  The other speakers were Sarah Coyne, counsel at Debevoise & Plimpton and a former Assistant U.S. Attorney in the Eastern District of New York and Chief of the Business and Securities Fraud Section; Kelly B. Kramer, a partner at Mayer Brown; Claudius O. Sokenu, a partner at Shearman & Sterling and former SEC Senior Counsel; and Linda Chatman Thomsen, a partner at Davis Polk & Wardwell and former SEC Director of Enforcement.  See also “Friendly Relations? When Nepotism May Violate the FCPA,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012).

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  • From Vol. 4 No.6 (Mar. 18, 2015)

    Ceresney, Focusing on Pharma, Discusses SEC Enforcement Priorities and Compliance Expectations

    Andrew Ceresney, the SEC’s Director of Enforcement, recently reaffirmed the SEC’s emphasis on cooperation and self-reporting and highlighted three pharmaceutical company practices that have led to FCPA enforcement actions.  Speaking at CBI’s Pharmaceutical Compliance Congress in Washington, D.C., Ceresney, like others before him, emphasized the benefits of self-reporting.  See also “Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

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  • From Vol. 4 No.5 (Mar. 4, 2015)

    $16 Million Goodyear SEC Settlement Highlights M&A Risks and Subsidiary Liability

    Goodyear Tire & Rubber Company has agreed to pay $16 million to settle civil FCPA charges, resolving allegations that it failed to detect more than $3.2 million in improper payments made by its Kenyan and Angolan subsidiaries.  The SEC says that due diligence failures relating to the acquisition of the Kenyan subsidiary and weak internal controls allowed the bribery to occur unchecked.  Goodyear received credit for self-disclosure, cooperation and remediation.  “Goodyear did very well,” Robert Appleton, a partner at Day Pitney, told The FCPA Report.  The company “got the best result I think it could have hoped for,” he said.  See also “Seven Issues to Address When Performing Pre-Acquisition Due Diligence,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2013).

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  • From Vol. 4 No.3 (Feb. 4, 2015)

    In Rare DPA, SEC Resolves FCPA Claims with PBSJ over Middle-Eastern Bribes

    Florida-based engineering and construction firm PBSJ Corporation (now the Atkins North America Holding Corporation) has agreed to pay $3.4 million to resolve FCPA claims with the SEC relating to bribes in Qatar and Morocco.  The claims were resolved via a Deferred Prosecution Agreement – an unusual settlement tool for the SEC.  The SEC also settled claims with Walid Hatoum, PBSJ’s former international marketing director, through an administrative proceeding.  We summarize the case and draw compliance lessons.  See also “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 3 No.25 (Dec. 17, 2014)

    Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In

    Selling your company’s business side on compliance; the key indicators of a successful compliance program; and the government’s view of M&A risks were all on the agenda of the FCPA enforcement officials' annual fireside chat with the FCPA defense community.  SEC Chief Kara Brockmeyer (FCPA Unit, Enforcement Division), and DOJ Deputy Chief Patrick Stokes (Fraud Section of Criminal Division) were both on hand for the “year in review” discussion at American Conference Institute’s recent International Conference on the Foreign Corrupt Practices Act.  The FCPA Report discussed the regulators’ presentation with prominent defense practitioners, who provided a few caveats to the regulators’ pronouncements.  In our previous issue, we covered Stokes’ and Brockmeyer’s discussion of enforcement priorities and the defense bar’s reaction.  Our coverage of last year’s “year in review” panel can be found here and here.

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  • From Vol. 3 No.25 (Dec. 17, 2014)

    Key Compliance Takeaways from the OECD Foreign Bribery Report

    For the first time, the Organisation for Economic Co-operation and Development has studied the entirety of the bribery cases (427 of them) brought by its 41 signatories over the past 15 years.  Calling the results of its Foreign Bribery Report a “new weapon in the global push to fight corruption,” the OECD says its Report seeks to “enable governments, companies and civil society to better understand and combat this insidious crime.”  Among other things, the Report found more bribery than many expected in wealthy countries and a drop in cases over the past two years.  FCPA experts Steven Michaels, counsel at Debevoise & Plimpton and Juan Morillo, a partner at Quinn Emanuel, talked to The FCPA Report about how compliance officers can use these findings.  See our previous coverage of the Report, “OECD Launches ‘New Weapon’ in Global Push to Fight Corruption,” The FCPA Report, Vol. 3, No. 24 (Dec. 3, 2014).

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  • From Vol. 3 No.25 (Dec. 17, 2014)

    Scientific Instrument Company Bruker Settles Civil FCPA Action for $2.4 Million, Raising Recurrent FCPA Themes

    Sightseeing trips around the world for employees of Chinese state-owned enterprises and sham collaboration agreements with those SOEs form the basis the SEC’s FCPA settlement with Bruker Corp., a Massachusetts-based manufacturer of scientific instruments.  The case features many of the recurring elements from past enforcement actions: employees of state-owned entities who may not intuitively be thought of as foreign officials; all-expenses-paid leisure trips disguised as business trips for officials responsible for purchasing decisions; weak compliance measures, including a failure to translate training presentations and hotlines into Chinese and the lack of an independent compliance or internal audit function in China; and no charges based on the anti-bribery provisions of the FCPA.

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  • From Vol. 3 No.24 (Dec. 3, 2014)

    Top FCPA Enforcers Tout Voluntary Disclosure and Warn About International Cooperation; The Defense Bar Responds

    At what has become a traditional annual speech summarizing the year in FCPA developments, Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC and Patrick Stokes, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, beat the government self-reporting drum, warned about increasing international anti-corruption enforcement and cautioned companies to re-evaluate confidentiality agreements they use during internal investigations.  The FCPA Report talked to prominent FCPA practitioners to get their take on this year’s speech at American Conference Institute's International Conference on the Foreign Corrupt Practices Act.  They said the significance of the speech lay in the tone and topics emphasized.  See our coverage of last year’s speech here and here.

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  • From Vol. 3 No.24 (Dec. 3, 2014)

    Caldwell and Ceresney Push Companies on FCPA Compliance, Cooperation and Self-Reporting

    Reinforcing familiar messages, senior government officials at the SEC and DOJ said the FCPA continues to be a priority and self-reporting and cooperation count a lot towards the mitigation of penalties.  Speaking at American Conference Institute’s recent International Conference on the Foreign Corrupt Practices Act, Assistant Attorney General Leslie R. Caldwell and the Director of the SEC Division of Enforcement Andrew Ceresney described the government’s focus going forward in each of their keynote speeches, including focusing on prosecuting individuals; the strengthening of the Kleptocracy Initiative; and increasing international cooperation.  The FCPA Report synthesizes their speeches here and also in this issue presents private practitioners’ takeaways from the government's "Year in Review" presentation at the conference.  See also “In Final Speech as Criminal Division Head, Mythili Raman Emphasizes DOJ’s Focus on Anti-Corruption Efforts, Highlighting Individual Convictions and Foreign Cooperation,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Compliance Experts from Altria, Noble Energy and HP Share Corruption Investigation Best Practices

    A recent American Bar Association program brought together compliance executives from several public corporations to discuss how to both satisfy the client and mollify the government during an anti-corruption investigation – no easy task.  The panelists, along with moderator Mara V.J. Senn, a partner at Arnold & Porter, shared insights and experiences on preparedness for internal investigations, the role of outside counsel, the calculus of voluntary disclosures and a number of other common issues faced by companies conducting internal investigations.  For more from Senn on internal investigations, see “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); and “Developing and Implementing the Investigation Plan (Part Two of Two),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014).  

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  • From Vol. 3 No.17 (Aug. 20, 2014)

    Comparing and Contrasting Three FCPA Experts’ Advice on Negotiating FCPA Settlements

    The FCPA Report recently published a series of interviews with FCPA experts Larry Urgenson, Neil MacBride and John Buretta on best practices for negotiating FCPA settlements with the government.  Their views, drawn from their experience as prosecutors and defense counsel, at times converged and differed on salient points, such as the dynamic self-reporting calculus, how to avoid international double jeopardy and the best ways to make a presentation to the government.  Urgenson is a partner at Mayer Brown who has held key leadership positions at the DOJ; MacBride is a partner at Davis Polk and the former U.S. Attorney for the Eastern District of Virginia; and Buretta is a partner at Cravath, Swaine & Moore and a former top official in the DOJ’s Criminal Division who helped to author the DOJ/SEC FCPA Resource Guide.  We synthesize the highlights of their interviews.

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  • From Vol. 3 No.15 (Jul. 23, 2014)

    Strategies for Negotiating FCPA Settlements: An Interview with Neil MacBride, Davis Polk Partner and Former U.S. Attorney

    Demonstrating to the SEC and/or the DOJ that a company is committed to compliance and that it has addressed whatever program deficiencies led to the violation is critical in FCPA settlement negotiations.  A failure to convince the government that it is trustworthy can result in, among other things, larger fines, the appointment of an expensive corporate monitor and a larger disgorgement figure.  In an interview with The FCPA Report, Neil MacBride, a partner at Davis Polk and former U.S. Attorney for the Eastern District of Virginia, shared his strategies for negotiating effectively with the government.  Drawing from his extensive experience, both as a prosecutor and a defense attorney, MacBride discussed the mechanics of meeting with the government, the self-reporting calculus, international double jeopardy and more.  See our previous interview in this series, “Strategies for Negotiating FCPA Settlements: An Interview with Laurence Urgenson, Mayer Brown Partner and Former DOJ Official,” The FCPA Report, Vol. 3, No. 14 (Jul. 9, 2014).

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  • From Vol. 3 No.14 (Jul. 9, 2014)

    Strategies for Negotiating FCPA Settlements: An Interview with Laurence Urgenson, Mayer Brown Partner and Former DOJ Official

    When a company is facing FCPA charges, it may have the opportunity to directly influence the outcome of the government’s investigation – a monitor may be deemed unnecessary, lower fines may be agreed upon and prosecutions may even be avoided.  In an interview with The FCPA Report, Laurence Urgenson, a partner at Mayer Brown and former DOJ official, shared his advice to help companies and their advisors present the company’s case in the most favorable light possible.  Drawing on his extensive experience, Urgenson provided insight into the changing self-reporting calculus, the need for an international anti-corruption protocol and the best ways to make a presentation to the government.  See also “When and How Should Companies Self-Report FCPA Violations? (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); and Part Two of Two, Vol. 1, No. 2 (Jun. 20, 2012). 

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  • From Vol. 3 No.12 (Jun. 11, 2014)

    FCPA Compliance Strategies for Hedge Funds and Private Equity Firms

    Given today's investment environment, with an unabated government focus on the private fund industry and significant opportunities developing in emerging markets, private equity fund managers are hard-pressed to ignore corruption risks in their businesses.  Molo Lamken, together with The FCPA Report and The Hedge Fund Law Report, recently hosted a panel that addressed hot topics in FCPA enforcement and compliance for this industry.  The panelists, including outside and in-house counsel, discussed, among other things: the current FCPA enforcement climate for private equity and financial services firms; strategies for mitigating the risk associated with third parties and service providers in high-risk countries; handling facilitation payments; self-reporting violations; and the importance of continuously monitoring compliance programs.  See “Corruption Considerations for Private Fund Managers: An Interview with Molo Lamken Partner Justin Shur,” The FCPA Report, Vol. 3, No. 11 (May 28, 2014).

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  • From Vol. 3 No.11 (May 28, 2014)

    The World Bank’s Wide Reach and Its Growing Anti-Corruption Program

    “What is the World Bank and why do I care what it thinks?”  Tim Coleman, a partner at Freshfields Bruckhaus Deringer, told The FCPA Report that many clients have that question – often prompted by an unexpected notice from the World Bank.  Companies that have contracted with foreign governments on a World Bank-financed project, along with companies that have signed deferred prosecution agreements with the DOJ containing a World Bank cooperation clause, may have put themselves in the World Bank’s jurisdiction.  “Any company or individual who touches my money is subject to the jurisdiction of my office,” Stephen Zimmermann, Director of Operations of the Integrity Vice Presidency of the World Bank, said at a speech at the American Conference Institute’s FCPA conference in New York.  And, he said, “just about every developing country project has World Bank money.”  The World Bank, which made $35 billion in loans last year to tens of thousands of contractors, is increasingly using its economic and political leverage to enforce its rules against fraud, collusion, obstruction, corruption and coercion. Penalties include not only debarment from the World Bank and the other major global development banks, but because the World Bank cooperates with governments around the world, investigations and potential penalties under national anti-corruption regimes.  Recently, a panel of World Bank experts at the Practising Law Institute’s FCPA and International Anti-Corruption Developments program, including Zimmermann, addressed critical issues about the Bank and its investigations.  One of the panelists, Tim Coleman, a partner at Freshfields, along with associate Jonathan Ware, further spoke with The FCPA Report about the challenges companies may face when the Bank investigates them and whether it makes sense for companies to settle.  See also “Doing Business with the World Bank: Understanding and Avoiding Debarment,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • From Vol. 3 No.10 (May 14, 2014)

    Global Enforcement Developments Evaluated by FCPA Experts

    What are the FCPA and global anti-corruption trends that companies should be focusing on as they review and enhance their compliance programs?  A recent panel at the Dow Jones Symposium, moderated by Rachel Ensign from the Wall Street Journal and featuring Martin T. Biegelman, an executive vice president at IPSA International, Michael J. Hershman, president and CEO of The Fairfax Group and Paul E. Pelletier, a member at Mintz Levin, highlighted some of the important developments.  See also “Assessing the Year in FCPA Enforcement and Looking Ahead,” The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014).

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  • From Vol. 3 No.10 (May 14, 2014)

    Global Enforcement Developments Evaluated by FCPA Experts

    What are the FCPA and global anti-corruption trends that companies should be focusing on as they review and enhance their compliance programs?  A recent panel at the Dow Jones Global Compliance Symposium, moderated by Rachel Ensign from the Wall Street Journal and featuring Martin T. Biegelman, an Executive Vice President at IPSA International; Michael J. Hershman, President and CEO of The Fairfax Group; and Paul E. Pelletier, a member of Mintz Levin, highlighted some of the important developments.  See also “Assessing the Year in FCPA Enforcement and Looking Ahead,” The FCPA Report, Vol. 3, No. 2 (Jan. 22, 2014).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    FCPA Experts in the Public and Private Sector Share Seven Lessons from Recent Cases (Part Two of Two)

    At a recent panel discussion sponsored by the Knowledge Group, former senior FCPA prosecutors, a current SEC lawyer and an economist shared advice on various critical aspects of an internal anti-corruption investigation, including factors to consider at the outset, whether to voluntarily disclose the investigation to the government, how to handle reporting to multiple jurisdictions, and calculating the “benefit of the bribe” for penalty purposes.  The first article in this two-part series contained the seven lessons the panelists extracted from recent FCPA settlements and trends; the initial decisions that a company faces when it discovers a potential violation; and the role of whistleblowers in revealing potential violations. See also “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.8 (Apr. 16, 2014)

    FCPA Experts in the Public and Private Sector Share Seven Lessons from Recent Cases (Part One of Two)

    At a recent panel discussion sponsored by the Knowledge Group, former FCPA prosecutors, a current SEC lawyer and an economist shared their insights on what recent FCPA enforcement actions mean for companies, along with advice for initiating and conducting FCPA investigations.  This article, the first of a two-part series, contains seven lessons the panelists have extracted from recent FCPA settlements and trends; initial decisions that a company faces when it discovers a potential violation; and the role of whistleblowers in revealing potential violations.  The second part of the series will cover the panelists’ insights on initiating internal investigations; voluntary disclosures; multi-jurisdictional concerns; negotiations with regulators; remediation efforts and calculation of fines.  See also “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Audit Committee Responsibilities Before, During and After Internal Investigations: Remediating and Disclosing the Investigation to the Government and the Public (Part Four of Four)

    The end of an internal investigation does not mean the end of work on the matter for a company and the audit committee.  When an internal corruption investigation is completed, “the board should have a full briefing as to the findings, along with recommendations as to what next steps the organization should take,” William Olsen, leader of the Global Investigations and Anti-Corruption Services group at Grant Thornton LLP, told The FCPA Report.  The board and the company must make a series of critical and difficult decisions relating to, among other things, voluntary disclosure to the government, remediation measures and public disclosures.  The role the audit committee should play in these issues can be hard to define.  The FCPA Report is publishing a four-part article series on audit committee responsibilities throughout an internal investigation. This final article in the series suggests best practices for an audit committee after the “meat” of the investigation is done, including whether and how to self-report and other crucial post-investigation decisions on remediation and SEC disclosures.  The first article in the series, “Five Steps to Take Before the Investigation Begins,” detailed the committee's responsibilities, the risks and liabilities it faces and steps it should take before the need to investigate arises. The second article, “Determining When and How to Proceed,” discussed vetting complaints for the audit committee, determining when an investigation is needed and who should lead the investigation. The third article, “Retaining Counsel, Gathering Information and Documenting the Investigation,” discussed what the company and audit committee should do when initiating an investigation; when the company should retain outside counsel and other experts; how the company should gather information relevant to the investigation; and whether and how the company should document the investigation.

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics

    At this year’s Momentum Global Anti-Corruption Congress, Charles Cain, Deputy Chief of the SEC’s FCPA Unit and Jeffrey H. Knox, Chief of the Fraud Section of the DOJ, Criminal Division, lifted the veil on the government’s thinking in FCPA investigations.  The discussion, led by David H. Resnicoff, a member at Miller & Chevalier, covered a range of topics on the minds of FCPA practitioners and compliance officers, including the timing of voluntary self-disclosures, the kinds of cases the government may decline to pursue, effective cooperation with FCPA investigations, the role of audit committees in compliance strategies and the programmatic success of the FCPA Guidance released in 2012.  See “When Should a Company Voluntarily Disclose an FCPA Investigation?,” The FCPA Report, Vol. 3, No. 4 (Feb. 19, 2014); and “DOJ and SEC Officials Provide Candid Insight into the Recently Issued FCPA Guidance,” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    When Should a Company Voluntarily Disclose an FCPA Investigation?

    Once a potential FCPA violation is discovered, the question looms large: Should the company voluntarily report the internal investigation to the government?  The DOJ and SEC emphasize the importance of self-reporting, arguing that it can lead to credit for cooperation in a settlement and even the brass ring, a declination.  But a company may ask why it should report an issue that the agencies are unaware of, and indeed, may never discover absent self-disclosure.  This guest article by Joe D. Whitley and Jason R. Edgecombe, partner and associate, respectively, at Greenberg Traurig, describes the landscape and summarizes the risks and benefits of both disclosure and non-disclosure so that counsel and their clients can make educated decisions about what is in their best interest once an FCPA violation is discovered. See also “When and How Should Companies Self-Report FCPA Violations? (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); Part Two of Two, Vol. 1, No. 2 (Jun. 20, 2012). 

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  • From Vol. 3 No.1 (Jan. 8, 2014)

    A Perspective from the FCPA Defense Bar on Brockmeyer and Duross’ “Year In Review”: Interview with Danforth Newcomb, of Shearman & Sterling

    Companies operating internationally should pay close attention when government regulators candidly discuss the FCPA.  But how should a company interpret the government’s comments?  How much weight should be given to any individual regulator’s predictions of trends?  At ACI’s recent International Conference on the Foreign Corrupt Practices Act in Washington, D.C., Charles Duross, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, and Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC, provided insight into the specific elements of FCPA enforcement that matter to leading regulators, as detailed in The FCPA Report’s two-part series.  See Part One of Two, Vol. 2, No. 24 (Dec. 4, 2013); Part Two of Two, Vol. 2, No. 25 (Dec. 18, 2012).  In an interview with The FCPA Report following that panel, Danforth Newcomb, a partner at Shearman & Sterling LLP and recognized expert on the FCPA, responded to the most pressing issues raised by Duross and Brockmeyer.  Newcomb’s no-nonsense approach to FCPA compliance and thoughtful dissection of the regulators’ comments enable in-house counsel, compliance officers and others to translate the regulators’ insights directly into actionable policies and procedures.

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  • From Vol. 3 No.1 (Jan. 8, 2014)

    How to Conduct an Anti-Corruption Investigation: Developing and Implementing the Investigation Plan (Part Two of Two)

    Once you have discovered that your company is the subject of an anti-corruption investigation – either one prompted internally or by the government – an investigation plan must be formulated and effectuated.  How can your company marshal resources most efficiently to ensure a thorough investigation?  What are the best methods for conducting interviews and collecting documents?  What should the company do in response to any issues identified by the investigation, and what collateral consequences should it be prepared to deal with?  While no two anti-corruption investigations are the same, this two-part guest article series written by Mara V.J. Senn and Michelle K. Albert, partner and associate, respectively, at Arnold & Porter LLP, walks through the anatomy of a typical investigation and identifies key considerations and best practices at each stage to aid both in-house and outside counsel.  This, the second article in the series, discusses, among other things, developing an investigative plan, strategies for witness interviews and document collection, ten best practices for cross-border investigations, managing the self-reporting calculus and handling remediation and other concerns at the end of the investigation.  The first article detailed typical triggers for investigations and explained ten crucial factors that a company should consider at the start of the investigation.

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  • From Vol. 2 No.25 (Dec. 18, 2013)

    Charles Duross and Kara Brockmeyer Discuss What Matters to Regulators When Negotiating FCPA Settlements (Part Two of Two)

    What are FCPA regulators and prosecutors looking for during company presentations?  How can a company shorten the time from its first meeting with the government to the resolution of its FCPA issues?  Charles Duross, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, and Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC, provided detailed insight at a recent ACI International Conference in Washington, D.C. on what regulators are looking for, discussing the government’s FCPA charging philosophies, investigative techniques and enforcement priorities, and dispensing advice about how companies can avoid or decrease FCPA penalties.  Among other things, the regulators highlighted the government’s continued focus on problematic travel and entertainment, warned that the DOJ and SEC will pursue matters involving charitable donations and commercial bribery, and provided tips for expediting government investigations and conducting effective settlement negotiations.  The first part of this article series contained insight from Duross and Brockmeyer about five micro trends within the overarching trend of increased FCPA enforcement: prosecution of individuals, SEC administrative proceedings focused on FCPA violations, increasing coordination between global regulators on anti-corruption matters, the persistence of use of corporate monitors following FCPA settlements and the continued FCPA risk posed by use of third parties.  See also “Top Government and Private FCPA Practitioners Discuss Global Enforcement, Self-Reporting, Facilitation Payments, M&A Due Diligence, Jurisdiction and NPAs,” The FCPA Report, Vol. 2, No. 11 (May 29, 2013).

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    K&L Gates Panel Reviews Anti-Corruption Enforcement in the U.S., the U.K., China, Australia, Latin America, Africa, Southeast Asia and Russia

    With the spate of new anti-corruption laws around the globe, and the evolution of laws already on the books, “it is critical for a company to have on-the-ground information and local support” in structuring an effective anti-bribery and anti-corruption (ABAC) program and responding to regulatory action in all of the regions in which it operates.  So said Dick Thornburgh, former Attorney General of the United States and former Governor of Pennsylvania, introducing a recent webinar presented by K&L Gates LLP, where Thornburgh is now of counsel.  The K&L Gates speakers who followed Thornburgh shared their direct local experiences and examined the state of the ABAC laws in their regions of speciality.

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  • From Vol. 2 No.21 (Oct. 23, 2013)

    Diebold Inc. Resolves Civil and Criminal FCPA Charges Related to Bribery in China, Indonesia and Russia for $48 Million

    Lavish vacations for foreign officials across the globe in return for business form the basis for many of the government’s allegations against Diebold, Inc., an Ohio-based maker of ATM machines and security systems.  Diebold settled with both the SEC and DOJ on October 22, 2013 and agreed to pay more than $48 million in fines, disgorgement and prejudgment interest for the alleged violations.  The government alleged that $3 million in illicit payments were made on behalf of Diebold in China, Russia and Indonesia from 2005-2010.  The DOJ charged the case as conspiracy to violate the anti-bribery provisions of the FCPA and a violation of the books and records provisions.  The company agreed to retain a compliance monitor for 18 months, often a costly and unwelcome proposition.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013); Part Two of Three, Vol. 2, No. 5 (Mar. 6, 2013); Part Three of Three, Vol. 2, No. 6 (Mar. 20, 2013)

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  • From Vol. 2 No.18 (Sep. 11, 2013)

    Best Practices for Reviewing Anti-Corruption Compliance Programs: Implementation, Remediation and Documentation (Part Three of Three)

    In an effort to provide concrete, practical advice on the critical but ambiguous task of reviewing anti-corruption compliance programs, The FCPA Report is publishing a series of three articles on the topic.  This, the third and final article in the series, provides four strategies for conducting the actual review; discusses three steps a company should take post-review; outlines issues surrounding documentation of the review; and examines how FCPA settlement agreements, including monitorships and self-reporting requirements, affect reviews.  The first article in the series discussed the importance of regular anti-corruption compliance reviews; detailed the government’s expectations for reviews; outlined how to create an efficient and effective compliance review schedule; and specified how companies should staff their compliance reviews.  The second installment discussed the chief obstacles companies face when conducting a review; provided strategies for creating management buy-in; described four steps a company should take when preparing for a review; and outlined what risk areas the review should address.

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  • From Vol. 2 No.17 (Aug. 21, 2013)

    The Essentials of the New Brazilian Anti-Corruption Legislation

    Spurred on by international pressure and massive street protests against corruption, the President of Brazil has signed sweeping new anti-bribery legislation.  The law has been a long time in coming – Brazil has been a party to the Anti-Bribery Convention of the OECD since 2000 and the United Nations Convention against Corruption since 2005; and this legislation was proposed three years ago.  Brazil, the planned site of the 2016 Olympics and the 2014 World Cup, holds enormous business potential for global companies because of its wealth of natural resources, growing middle class, relatively stable currency and other pro-development economic dynamics.  However, the country has notoriously Byzantine tax and regulatory systems, and corruption is endemic, making the business environment there difficult to navigate.  See “A Seven-Step Process for Mitigating Corruption Risk When Engaging Third-Party Consultants in Brazil,” The FCPA Report, Vol. 1, No. 7 (Sep. 5, 2012).  How will this new law change the risk landscape there?  In an interview with The FCPA Report, Andrew M. Levine, a partner with Debevoise & Plimpton LLP, explained in detail the salient points of the new law and its implications for companies doing business in Brazil.

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  • From Vol. 2 No.14 (Jul. 10, 2013)

    How Can a Company Improve Its Chances of Obtaining an FCPA Declination?

    In 2012, the DOJ publicly announced that it had declined to prosecute Morgan Stanley for FCPA violations caused by a rogue employee in Shanghai.  The declination was notable because it was publicly announced and because of the egregious nature of the misconduct involved.  See “Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012).  A recent program at the Momentum Event Group’s Global Anti-Corruption Congress, “Lessons Learned from Recent High Profile FCPA Declinations,” featured a panel discussion of several recent FCPA declinations.  The panelists, who were closely involved in those matters, presented their views of why the declinations were issued and how companies facing FCPA violations can improve their chances of receiving a declination.  This article summarizes the key insights from that discussion.

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    U.S. Attorney Loretta Lynch Discusses Morgan Stanley, Ralph Lauren and the Government’s View on Compliance Programs, Self-Reporting, Monitors and More

    Every year, multi-national companies spend great sums on anti-corruption compliance.  By building robust compliance programs, companies seek to decrease corruption and also to limit company liability if bribery occurs.  However, many companies struggle with not only creating and maintaining an effective compliance program, but also communicating that program to the government if there is a problem.  At a recent conference hosted by the Society of Corporate Compliance and Ethics, Loretta Lynch, U.S. Attorney for the Eastern District of New York, shared a prosecutor’s perspective on corporate compliance programs.  Lynch also provided insight into the government’s position on employee discipline, training, self-reporting and corporate monitorship, along with specific discussions of the Ralph Lauren and Morgan Stanley cases.  See also “Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012); “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 2 No.11 (May 29, 2013)

    Digging Deep into M&A Anti-Corruption Due Diligence Best Practices: An Interview with William Michael, Partner at Mayer Brown LLP

    Anti-corruption due diligence before, during and after a merger or acquisition is an area of increasing focus for companies.  Members of the FCPA bar report that more and more of their work involves ensuring target companies are free from corruption, and handling the situation if corruption is discovered.  The FCPA Report recently spoke with William Michael, Co-Chair of the White Collar Defense & Compliance group at Mayer Brown LLP in Chicago, about his experience with these issues.  Previously, Michael served for more than 10 years as a federal prosecutor with the Department of Justice.  Among other things, Michael discussed important questions to ask during a risk assessment; strategies for negotiating for more access to the target company during due diligence; the effect of blocking statutes on due diligence; the risks and benefits of voluntarily disclosing a violation before or after a transaction; whether and how the Resource Guide clarified best practices; and advice on increasing the odds of achieving a declination from the SEC or DOJ if misconduct is discovered post-transaction.  See also “How to Perform Effective FCPA Due Diligence in Private Equity Transactions and Strategic Mergers and Acquisitions,” The FCPA Report, Vol. 2, No. 5 (Mar. 6, 2013).

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  • From Vol. 2 No.11 (May 29, 2013)

    Top Government and Private FCPA Practitioners Discuss Global Enforcement, Self-Reporting, Facilitation Payments, M&A Due Diligence, Jurisdiction and NPAs

    It’s been a busy year in FCPA compliance and enforcement – including leadership changes at the DOJ; the SEC’s first-ever NPA; an apparent decline in enforcement actions followed by a recent upswing; a growing, active global anti-corruption community; a new Canadian anti-corruption regime; and increased emphasis on merger and acquisition due diligence in the private sector, among other things.  At a recent panel hosted by the Practising Law Institute during its “Foreign Corrupt Practices Act and International Anti-Corruption Law Developments 2013” program, distinguished FCPA lawyers in both the private and public spheres distilled the most important trends in the field – and sometimes disagreed about what they mean for both outside and in-house counsel who deal with anti-corruption issues.  Mark Mendelsohn, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP moderated the May 2, 2013 panel, with help from Richard Grime, a partner at O’Melveny & Myers LLP.  The panel was comprised of Roger Witten of WilmerHale and Danforth Newcomb of Shearman & Sterling LLP on the private side, and Jason Jones, Assistant Chief of the FCPA Unit, Fraud Section, Criminal Division at the DOJ, and Charles Cain, Deputy Chief, FCPA Unit, Division of Enforcement at the SEC, on the public side.

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  • From Vol. 2 No.10 (May 15, 2013)

    Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training

    The government has made it clear that complying with the FCPA does not, and should not, require companies to adopt a one-size-fits-all solution.  Each company must tailor its program to its unique business model.  Despite the individuality of each program, however, it is useful for a company and its advisors to understand how the company’s peers and competitors are ensuring FCPA compliance.  How much are companies spending on anti-corruption compliance?  What type of training program does each company find effective?  What percentage of companies invest in risk assessments?  A recent panel hosted by the Practising Law Institute provided answers to these questions and more.  Combining commentary from industry experts Mark Mendelsohn, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, Alexandra Wrage, president of TRACE International, Inc., Raja Chatterjee, Global Head of the Anti-Corruption Group at Morgan Stanley, and Susan Ringler, Deputy General Counsel for Xylem Inc., as well as interactive audience polling of conference participants (including in-house counsel, outside counsel and compliance personnel), the panel provided unique insight into trends and patterns in the FCPA world.  The panel analyzed the difficult issues that arise when developing training programs, allocating anti-corruption compliance resources, conducting risk assessments, executing internal investigations and making voluntary disclosures.  See “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).  See also The FCPA Report’s FCPA Training That Works series: Navigant’s Joseph Spinelli (Apr. 3, 2013); Weatherford’s Billy Jacobson (Apr. 17, 2013); Manatt Phelps & Phillips’ Jacqueline C. Wolff (May 1, 2013).

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  • From Vol. 2 No.9 (May 1, 2013)

    Handling the Challenges of Overseas Anti-Corruption Investigations: Forensic Accountants, Government Expectations, Translators, Upjohn Warnings, Privilege Issues and Recording Interviews

    Internal FCPA investigations do not respect jurisdictional boundaries, and varying customs and laws of different areas critically impact not only internal investigations, but also prosecutions and litigations for multi-national companies that may follow.  Failing to identify and address the specific issues relevant to an anti-corruption investigation can have significant legal and financial consequences.  A recent panel of experts at the American Bar Association’s Institute on Internal Investigations and Forum for In-House Counsel discussed the complexities of internal investigations, sharing their advice on best practices starting with actions to take during the first 72 hours of the investigation.  From both government and private sector perspectives, the panel addressed how to handle language and cultural differences, as well as how to navigate varying legal regimes that affect privilege and complicate the collection of documents.  They also provided insight on interviewing witnesses and how best to deal with the U.S. government when it comes to disclosing an investigation.

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  • From Vol. 2 No.9 (May 1, 2013)

    SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting

    While implementing an enhanced FCPA compliance program in 2010, Ralph Lauren Corporation (RLC) unearthed a multi-year bribery scheme perpetrated through its Argentine subsidiary, P.R.L.-S.R.L.  RLC reported its findings to the SEC and DOJ within two weeks and cooperated fully with their subsequent investigations.  As a result, the SEC entered into its first-ever non-prosecution agreement (NPA) with RLC.  Simultaneously, the DOJ entered into a separate NPA with RLC.  RLC has agreed to pay aggregate disgorgement, interest and penalties of over $1.6 million, to cooperate further with the SEC and DOJ, to enhance its compliance program and take further remedial measures and to report back to the DOJ for two years.  This article summarizes the terms of those agreements which, among other things, evidence the potential benefits for companies that self-police, self-report and cooperate fully with the SEC and DOJ.  See also “SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    Lessons from the Latest Anti-Corruption Developments in the U.K., Brazil and China

    A single-minded focus on the FCPA with a passing nod to other countries’ regulatory regimes is not enough to make a company’s compliance program first-in-class today; multinational companies must fully address an array of global anti-bribery laws in an environment of growing global enforcement and increased prosecutorial vigor.  Regulatory regimes in other countries may not be consistent with existing company compliance programs.  In a recent webinar, partners from Hogan Lovells shared their insight and experience on navigating the latest global developments in anti-bribery and corruption regulation and enforcement.  This article conveys the highlights from the discussion, focusing primarily on the anti-corruption regimes in China, the U.K. and Brazil.

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics

    In a recent panel discussion held at the New York City Bar, Kara Brockmeyer, Chief of the SEC’s FCPA Unit, and Mark Schonfeld, a partner at Gibson Dunn & Crutcher LLP, discussed the SEC’s role in civil FCPA enforcement from a private and public perspective.  The panel was moderated by Wayne Carlin, a partner at Wachtell, Lipton, Rosen & Katz.  The three experts shared useful insights regarding managing the costs of FCPA investigations, creating strong compliance programs, negotiating with the SEC and deciding whether to voluntarily disclose a violation to the government.

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Three of Three)

    Resolving a government FCPA investigation is a costly proposition; if a company is required to retain a monitor, the costs skyrocket.  Companies can limit the burden of monitorship, however, by carefully vetting their monitor candidates and choosing a monitor that is business-minded, pragmatic and efficient.  This article details the specific characteristics a company should look for when choosing a monitor and discusses strategies for limiting the costs of monitorship.  The first article in this three-part series examined precedent, practice and trends in post-settlement FCPA reporting obligations; discussed the shift to less traditional forms of reporting; explained the process by which reporting obligations are created; and described the mechanics of the most intrusive types of reporting – traditional monitorship and self-reporting.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).  The second article in this series provided real-world examples of innovative reporting requirements and outlined strategies for negotiating the most beneficial reporting requirements possible.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Two of Three),” The FCPA Report, Vol. 2, No. 5 (Mar. 6, 2013).

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How to Manage a Multi-National Anti-Corruption Investigation

    Managing a single internal anti-bribery investigation that spans multiple jurisdictions requires forethought, coordination, creativity and preparation.  When leading an investigatory team, counsel must consider both the laws and customs of the United States and the laws and customs of the multiple jurisdictions where its client maintains operations.  Counsel also must be mindful of the relationships between various jurisdictions.  Failing to identify and address the specific issues relevant to an investigation can have significant legal and financial consequences.  A panel of experts at the New York City Bar recently shared their insights on how to successfully run a complex international investigation.  The panelists offered advice on, among other things, navigating data privacy laws; protecting the attorney-client privilege; addressing employee rights; and determining whether to voluntarily disclose the results of an internal investigation.

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Two of Three)

    For many years, the world of post-settlement FCPA reporting requirements was black and white – companies were either required to submit to a multi-year independent compliance monitor or the settlement contained no reporting obligations at all.  Today, as companies develop innovative reporting requirements to satisfy the government, solutions are often found in the gray area.  Finding a customized solution to reduce potentially onerous reporting requirements is crucial, and this article, the second in a three-part series, provides five practitioner-approved strategies to do just that.  In addition to advising on negotiating post-settlement reporting requirements with the government, this article also discusses real-world examples of innovative reporting requirements.  The third article in the series will describe how to choose the best possible monitor and outline strategies for limiting the expenses of monitorship.  The first article in the series examined precedent, practice and trends in post-settlement FCPA reporting obligations; discussed the shift to less traditional forms of reporting; explained the process by which reporting obligations are created; and described the mechanics of the most intrusive types of reporting – traditional monitorship and self-reporting.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    Facilitation Payments, Foreign Officials, Bona Fide Expenditures and More: Actionable Insight from the Authors of “Defending Clients in FCPA Investigations”

    Mark P. Goodman and Bruce E. Yannett, partners at Debevoise & Plimpton LLP, and Daniel J. Fetterman, a partner at Kasowitz, Benson, Torres & Friedman LLP, are the FCPA experts behind “Defending Clients in Foreign Corrupt Practices Investigations,” a chapter in the 2012 treatise “Defending Corporations and Individuals in Government Investigations.”  Their chapter addresses the hot button issues companies are facing today as the SEC and DOJ continue to increase the pressure on global companies to implement and enforce best of breed FCPA compliance programs.  Goodman and Fetterman recently shared their insight on some of these pressing issues with The FCPA Report.  In our interview, they discussed how far the FCPA’s jurisdiction reaches in light of recent case law and the FCPA Guidance, including the jurisdictional implications for aiders, abettors and conspirators; details regarding rewards under the new Dodd-Frank whistleblower provisions; who is a foreign official and whether it matters; how companies should handle facilitation payments; advice on reasonable business expenses after the Guidance; the concept of virtual strict liability in accounting violations of the FCPA; how judicial review will impact settlements; the collateral effects of an FCPA settlement; and when to self-report an FCPA violation.

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  • From Vol. 2 No.4 (Feb. 20, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three)

    Looming large in every FCPA settlement negotiation with the government is the reporting requirements the company will be subject to going forward.  Historically, companies had only two options at the negotiating table – plead for no future reporting to be required or accept an onerous and expensive multi-year compliance monitorship.  Thanks, in part, to the increased sophistication of many in-house compliance programs, the government is embracing new and creative reporting obligations, leaving room for companies to negotiate tailored solutions.  How can companies negotiate an agreement that meets the government’s need to decrease recidivism while limiting the uncertainty, invasiveness and expense of extensive reporting requirements?  This article, the first in a three-part series, examines precedent, practice and trends in post-settlement FCPA reporting obligations; discusses the shift to less traditional forms of reporting; explains the process by which reporting obligations are created; and describes the mechanics of the most intrusive types of reporting: traditional monitorship and self-reporting.  The second article in this series will discuss real-world examples of innovative reporting requirements and recommend specific strategies companies can use to negotiate the most beneficial reporting requirements possible.  The third article will provide advice on choosing the best possible monitor and tactics for limiting the expenses of a monitorship.

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Specific Strategies from Goldman Sachs, Société Générale and Leading Law Firms on Conducting Cross-Border FCPA Investigations

    The considerable challenges posed by an internal FCPA investigation are compounded when that investigation involves a cross-border component – as it almost invariably does.  In-house and outside counsel in cross-border investigations must navigate legal regimes that often conflict (notably in the area of data privacy); divergent approaches to the attorney-client privilege; varying business and governance structures; and different languages and cultural mores.  Moreover, best practices in the area of cross-border investigations are not codified or neatly packaged; rather, they are a function of long and often arduous experience.  In an effort to identify and communicate some of those best practices, a seasoned panel of in-house and law firm lawyers convened in New York on January 15, 2013 for a panel hosted by Catalyst, an e-discovery services provider.  The panel was moderated by Vasu Muthyala, counsel at O’Melveny & Meyers LLP.  He was joined by Greg Andres, partner at Davis Polk & Wardell LLP; John Driscoll, Managing Director and Director of Litigation and Regulatory Affairs at Société Générale; Justin Shur, partner at Molo Lamken LLP; John Tredennick, Chief Executive Officer of Catalyst; and Christine Chi, Global Head of the Anti-Bribery Group at Goldman Sachs.  The panelists discussed, among other issues: major challenges facing companies performing cross-border investigations, including the differing notions of data privacy and attorney-client privilege in different regions and strategies for coordinating with multiple jurisdictions; tips for conducting a cross-border investigation, including when to retain outside counsel; and the dynamics of reporting, both obligatory reporting via a Suspicious Activity Report and voluntary disclosure, especially in the current whistleblower climate.

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    In Possible Sign of Escalation of Canadian Anti-Bribery Enforcement, Griffiths Energy Agrees to Pay $10.35 Million to Resolve CFPOA Charges

    In line with many predictions about the imminent increase in what has been historically weak Canadian anti-bribery enforcement, Calgary-based Griffiths Energy International Inc. has pled guilty to violating the Corruption of Foreign Public Officials Act, Canada’s analogue to the FCPA.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part Two of Two)

    On November 14, 2012, the SEC and DOJ jointly issued long-awaited guidance on the FCPA (Guide or Guidance), spurred in part by the Organisation for Economic Cooperation and Development’s recommendation, and business pressures for more clarity about the FCPA and the government’s enforcement of it.  This article continues our extensive coverage of the Guidance and the practical implications of it, offering concrete suggestions to anti-bribery professionals on avoiding, handling and settling enforcement actions, conducting internal investigations and executing mergers and acquisitions.  This article – the second in a two-part series – uses input from leading FCPA experts to extract practical lessons from the Guide, including what it says about compliance programs and internal controls; whether the Guide sheds any light on what constitutes a facilitation payment and who constitutes a foreign official, and whether those distinctions are important; the Guide’s insight on third-party due diligence, successor liability and statute of limitations issues; and whether the Guide affects the self-reporting calculus.  The first article in this series addressed the backstory of the Guide and why it was issued; how companies and their counsel can use the Guide and the hypotheticals included in it; advice that can be distilled from the Guide on gifts, travel and entertainment; deficiencies in the Guide and which areas of the law remain unclear; and the highlights and lowlights of the Guide’s declination section.  See “Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part One of Two),” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Sullivan & Cromwell Partners Discuss Managing FCPA Risk in Cross-Border Mergers and Acquisitions

    On December 10, 2012, the Practising Law Institute (PLI) hosted a webinar entitled “FCPA Due Diligence in Cross Border Transactions.”  The presenters were Francis J. Aquila and Krishna Veeraraghavan, both partners in Sullivan & Cromwell LLP’s mergers and acquisitions group.  The PLI program provided a helpful overview of the importance and mechanics of performing anti-corruption due diligence as part of a cross-border merger or acquisition.  Among other things, the presenters discussed: successor liability issues; strategies for reducing compliance risks; how to design an FCPA due diligence plan; key questions to ask when performing pre-acquisition due diligence; what to do if due diligence uncovers corruption; how to structure a deal to avoid FCPA liability; and appropriate post-acquisition conduct.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Recent Developments in U.K. Bribery Act Enforcement: SFO Head Green Speaks, Abbot Group Settles and Rolls-Royce Reveals Bribery Investigation

    There is growing concern that the U.K. Bribery Act 2010 (Bribery Act), which took effect in July 2011, may pose more serious risks for multinational businesses than the FCPA.  This is due, in part, to the fact that the Bribery Act extends to private as well as government bribery and does not have an exception for “facilitating payments.”  On November 13, 2012, David Green CB QC, who is the Director of the U.K.’s Serious Frauds Office (SFO), gave testimony before the Justice Committee of the House of Commons.  His testimony provides insight into how, under his direction, the SFO may be expected to approach anti-corruption efforts in general, and enforcement of the Bribery Act in particular, especially with regard to self-reporting and deferred prosecution agreements.  In other recent U.K. developments, Scotland’s Crown Office and Procurator Fiscal Service announced its first-ever civil settlement.  The government reached an agreement with Abbot Group Limited arising out of overseas corrupt payments, and Rolls-Royce plc announced that it had reported to the SFO information with respect to bribery and corruption involving overseas intermediaries.  This article highlights the key take-aways of Green’s testimony that are relevant to anti-bribery enforcement and summarizes the Abbot and Rolls-Royce matters.  For more on the mechanics of the Bribery Act, see “Finding Clarity in the New U.K. Bribery Act,” The FCPA Report, Vol. 1, No. 12 (Nov. 14, 2012).

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Comprehensive FCPA Guidance Provides a Roadmap for Companies to Reevaluate and Revise Their Compliance Policies

    On November 14, 2012, the DOJ and SEC jointly published “A Resource Guide to the U.S. Foreign Corrupt Practices Act” (Guidance), their long-awaited and highly anticipated guidance on the FCPA.  The Guidance did not pronounce any new defenses or radically reinterpret any of the FCPA’s provisions, but it does provide useful insights into the government’s enforcement considerations and should serve as a roadmap for companies to reevaluate and revise their FCPA compliance policies.  In a guest article, Paul E. Pelletier and Aaron M. Tidman, member and associate, respectively, at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., analyze the guidance and outline how practitioners may use the guidance to update their compliance policies and procedures.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Lanny Breuer, William Jacobson and F. Joseph Warin Discuss FCPA Guidance at ACI’s 28th National Conference on the FCPA

    On November 15, 2012, at the opening session of the American Conference Institute’s 28th Annual FCPA Conference, the conference chairs, William Jacobson and F. Joseph Warin, shared their perspectives on the recently-released joint DOJ/SEC “Resource Guide” to the FCPA (Guide or Guidance).  For additional insight from Warin, see “Five Themes for General Counsel to Monitor with Respect to Dodd-Frank Whistleblowers and the FCPA,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).  Lanny Breuer, Assistant Attorney General for the Criminal Division of the DOJ, also shared his views the following day on both the Guide and the DOJ’s broad enforcement goals.  This article summarizes the remarks of Jacobson, Warin and Breuer.

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  • From Vol. 1 No.13 (Nov. 28, 2012)

    Top Government Officials Discuss FCPA Enforcement Actions Initiated During 2012 and Their Significance

    On November 16, 2012, at ACI’s 28th Annual FCPA Conference, top regulators from the DOJ and SEC discussed FCPA enforcement developments in a lively panel called the “2012 FCPA Overview.”  The panelists discussed, among other things, the “message” from recent cases, including the much-touted Morgan Stanley case and the “rogue employee” defense; the benefits of self-reporting; the increased capacity of the government to detect misconduct; and whether requirements for financial reporting are expanding.  The 2012 overview panel was moderated by Lucinda A. Low, a partner at Steptoe & Johnson, LLP, and head of its FCPA practice.  It featured the SEC’s Kara Novaco Brockmeyer and the DOJ’s Charles Duross.  Brockmeyer has been Chief of the SEC’s FCPA Unit since September 2011.  Prior to that, she served as Assistant Director of its Enforcement Division and in other capacities since 2000.  Duross is Deputy Chief of the Fraud Section in the DOJ’s Criminal Division and is in charge of all of the DOJ’s FCPA cases.  He previously served as an Assistant U.S. Attorney.

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  • From Vol. 1 No.10 (Oct. 17, 2012)

    Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations

    In April 2012, Morgan Stanley Managing Director Garth Peterson pleaded guilty to one count of conspiring to circumvent Morgan Stanley’s internal controls in violation of the FCPA.  The plea was the result of his efforts to enrich himself and the Chinese official who facilitated a Shanghai real estate deal with his Morgan Stanley unit.  Notably, the DOJ indicated that it was declining to bring charges against Morgan Stanley as a result of Peterson’s misconduct.  In a recent webcast, Morgan Stanley’s anti-corruption chief, Raja Chatterjee, and its outside counsel from Davis Polk & Wardwell LLP, discussed the “unprecedented and important” decision not to prosecute Morgan Stanley for Peterson’s FCPA violations.  They believe that, by declining to prosecute Morgan Stanley, the DOJ has made a statement that “compliance matters” and that an effective compliance program can be a mitigating factor in an FCPA investigation.  This article summarizes the webcast with a view to identifying the lessons that can be learned from the Morgan Stanley matter.  See also “Civil and Criminal Enforcement Actions Against Former Morgan Stanley Employee Highlight the Relevance of the FCPA for Private Fund Managers,” The Hedge Fund Law Report, Vol. 5, No. 19 (May 10, 2012).

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  • From Vol. 1 No.10 (Oct. 17, 2012)

    Britain’s Serious Fraud Office Updates Guidance on the Bribery Act, Reinforcing Its Role as a Crime Fighting Agency

    While much of the U.S. anti-corruption community was focused on the expected arrival of FCPA guidance from the DOJ and the SEC, on October 9, 2012, the Serious Fraud Office (SFO), the U.K.’s agency with primary responsibility for enforcing the Bribery Act, beat them to the punch, releasing new guidelines relating to certain aspects of the Act in a tone that emphasizes the importance the SFO is placing on targeting bribery.  This article details the substance of the guidance and its implications for operating companies.

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  • From Vol. 1 No.6 (Aug. 22, 2012)

    Compliance Implications of the Current Enforcement Climate: An Interview with Mike Koehler, the FCPA Professor (Part One of Two)

    The FCPA Report recently interviewed Mike Koehler, Assistant Professor at Southern Illinois University School of Law and author of the popular blog the FCPA Professor.  He has testified before Congress and written extensively about FCPA issues.  Professor Koehler previously was Assistant Professor of Business Law in the College of Business at Butler University, and before that was an attorney at Foley & Lardner LLP, where he conducted FCPA investigations on behalf of companies, negotiated resolutions to FCPA enforcement actions with government enforcement agencies and advised clients on FCPA compliance and risk assessment.  In the first part of our interview, which is included in this issue of The FCPA Report, Professor Koehler spoke about the long tail on FCPA violations and the “gray cloud” that hangs over companies once they self-report, and he questioned whether companies should self-report at all.  See also “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  He also shared compliance advice in light of recent enforcement trends relating to facilitation payments, the “obtain or retain business” element of the statute and the definition of foreign officials.  In addition, Professor Koehler discussed compliance lessons arising out of the unique way the FCPA is enforced and the relative lack of judicial scrutiny of the statute.

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  • From Vol. 1 No.4 (Jul. 25, 2012)

    An Interview with Judge Stanley Sporkin, the “Father of the FCPA” (Part Two of Two)

    This article includes the second part of The FCPA Report’s extensive interview with the esteemed Judge Stanley Sporkin, who is widely credited with developing the books and records provision of the FCPA when he was Director of the Division of Enforcement of the SEC in the 1970s.  Judge Sporkin was also a federal judge in the District of Columbia and General Counsel of the CIA, and is currently the Ombudsman for BP America.  The second part of our interview includes Judge Sporkin’s comments on: self-reporting; the new FCPA Unit at the SEC; his proposal for amnesty; the biggest mistake companies make when it comes to corruption; the movement to amend the FCPA; the potential importance of ombudsmen; and combining anti-corruption audits with annual audits.  In the first part of the interview, Judge Sporkin offered insight into, among other things: the origins of the FCPA following the Watergate hearings; his contemporaneous view on the difficulty of substantiating anti-bribery claims; the origins of internal investigations; and the pro-business orientation of the FCPA.  See An Interview with Judge Stanley Sporkin, the ‘Father of the FCPA’ (Part One of Two),” The FCPA Report, Vol. 1, No. 3 (Jul. 11, 2012).

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  • From Vol. 1 No.2 (Jun. 20, 2012)

    When and How Should Companies Self-Report FCPA Violations? (Part Two of Two)

    Companies and individuals frequently face the question of whether to self-report FCPA violations.  Generally, parties self-report where they expect that the “credit” received for doing so will outweigh the various detriments (e.g., revealing a legal violation that otherwise might have gone unnoticed, losing control of an investigation, etc.)  Accordingly, implicit in any self-reporting determination is an estimate of the value of credit to be obtained.  Parties making such an estimate are, at least in theory, assigning a value to anticipated credit, then discounting that credit by the likelihood of obtaining it.  In practice, however, quantifying the value of credit to be obtained for self-reporting FCPA violations is a challenging exercise.  Various categories of credit – declinations and dropping of charges, for example – are hard to quantify; and assigning probabilities to government action is an infamously imprecise errand.  So, what are companies and individuals considering self-reporting to do?  The answer is to think through the self-reporting calculus in a structured, methodical way – to approach such decision-making with a workable framework.  To assist our subscribers in doing so, we have provided the building blocks of such a framework in this two-part article series.  In particular, part one of this series: provided a detailed definition of self-reporting; discussed relevant precedent, including plea agreements, settlements, speeches and fines; identified six questions that a company must answer before deciding whether or not to self-report; highlighted three of the chief arguments in favor of self-reporting; and analyzed whether and how the value of self-reporting can be quantified.  See “When and How Should Companies Self-Report FCPA Violations (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).  This part two addresses: the risks inherent in self-reporting; the likely effect of new FCPA insurance products on self-reporting; the mechanics of self-reporting (e.g., timing, to whom, who decides, etc.); and the impact on self-reporting determinations of the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

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  • From Vol. 1 No.1 (Jun. 6, 2012)

    When and How Should Companies Self-Report FCPA Violations? (Part One of Two)

    A company that discovers an FCPA violation by one of its employees faces a fundamental question with potentially profound business consequences: Should the company self-report the violation to the government?  Generally, the rationale for self-reporting is that companies may receive “credit” for doing so, for example, reduced or eliminated sanctions.  However, in the uncertain world of self-reporting, there are no guarantees.  Whether a company receives credit at all, how that credit is measured and applied, whether that credit mitigates other risks arising out of the same violations – these and related questions are fact-specific, guided but not governed by precedent and practice.  In short, self-reporting is an inherently ambiguous process.  This is squarely at odds with the data-driven decision-making that corporate boards and management teams engage in, or at least aspire to.  Accordingly, corporate decision-makers and the in-house and outside lawyers who advise them have been groping for a reliable framework for thinking through self-reporting questions.  To date, no generally accepted framework has been forthcoming.  The purpose of this two-part article series is to fill that gap.  To do so, this article: provides a detailed definition of self-reporting; discusses relevant precedent, including plea agreements, settlements, speeches and fines; identifies six questions that a company must answer before deciding whether or not to self-report; highlights three of the chief arguments in favor of self-reporting; then discusses whether and how the value of self-reporting can be quantified.  The second article in this series will address: the risks inherent in self-reporting; the effect that new FCPA insurance products may have on self-reporting; the mechanics of self-reporting (e.g., timing, to whom, who decides, etc.); and the impact on self-reporting determinations of the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  The analysis in this article is a combination of proprietary domain expertise and extensive interviews with leading practitioners, who are quoted in depth.  In addition, this article contains numerous links to relevant documents and authority.  While this article cannot conclusively answer the question with which it opened – Should a company self-report an FCPA violation to the government? – it can help practitioners avoid missing a critical question or issue that should be part of a thorough analysis.

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