The Anti-Corruption Report

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

Recent Issue Headlines

Vol. 2, No. 9 (May 1, 2013) Print IssuePrint This Issue

  • A Guide to Disclosing Corruption Investigations in SEC Filings (Part One of Four)

    When a company becomes aware of a bribery allegation, various difficult decisions materialize.  For public companies, chief among those decisions is whether, when and how to disclose the matter in an SEC filing.  Public companies are required to disclose material information or events affecting the company, but the definition of material can be amorphous, and the stakes are high.  Public disclosure of a corruption problem exposes companies to civil lawsuits, stock price instability, reputational damage, waning employee morale and productivity, loss of current government contracts and debarment from future contracts.  The potential consequences add urgency to the questions: “When does a company have to disclose?” and “How can a company minimize the negative impact of the disclosure?”  The FCPA Report is addressing these questions and others in a four-part series that will serve as a reference guide for disclosing corruption matters in SEC filings.  Specifically, this series will provide guidance on whether and at what stage of an internal investigation to make the disclosure and how to craft language to mitigate the fallout from such disclosure.  In addition to analysis and insight from sources, this series will include a compendium of actual FCPA-related disclosures from recent SEC filings.  These real-world examples of relevant disclosures can serve as precedents for counsel tasked with drafting or reviewing SEC filings relating to an FCPA issue.  This article, the first in the series, discusses: factors that companies should consider when determining whether a public disclosure is appropriate; what experts a company should retain to help it make appropriate disclosure decisions; and the risks and benefits of disclosing at different stages of the anti-corruption investigation.  The second article in this series will: detail the risks inherent in disclosure and non-disclosure; address ways to diminish those risks, including how to handle the media; and discuss best practices when disclosing foreign investigations to the SEC.  The third article will provide insight on the most beneficial language to use in disclosures, and will analyze Wal-Mart's disclosures at different times in its FCPA investigation.  The fourth installment will be the referenced compendium of SEC disclosures, categorized by their attributes.

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  • Strategies for Mitigating the FCPA Risk of Entering Into Joint Ventures

    Companies are relying increasingly on joint ventures (JVs), that is, a business undertaking by two or more companies engaged in a single defined project, particularly when accessing a new market or building a new business line.  While JVs may make sound business sense – allowing the JV partners to leverage one another’s expertise, markets, resources, reputations, etc. – they also present significant legal risk under the FCPA.  Although the potential for FCPA liability based on the actions of a joint venture or one of its partners may depend on the level of control a company has over the joint venture or the extent to which it was aware of or involved in the misconduct, the risk of partnering with a company engaged in misconduct is always present.  In a guest article, Andrew J. Dunbar and Ike Adams, partner and associate, respectively, at Sidley Austin LLP, discuss the FCPA provisions giving rise to joint venture liability based on the actions of joint ventures and joint venture partners as well as the steps companies should take before entering into joint ventures in order to limit the risk of FCPA liability.

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  • FCPA Training That Works: An Interview with Jacqueline C. Wolff, Co-Chair of the Corporate Investigations & White Collar Defense Practice at Manatt, Phelps & Phillips, LLP

    This is the third article in our ongoing series on FCPA and anti-corruption training.  Each of the articles in the series is based on a long-form interview with a thought leader from a different discipline.  Collectively, the articles in this series provide a deep and multidisciplinary view of one of the most important processes available to companies to mitigate FCPA risk.  Our goal in this series is to provide actionable insight – recommendations, best practices and specific techniques that companies can use to improve the effectiveness of their training programs.  To advance that goal, this installment includes our interview with Jacqueline C. Wolff, a Partner at Manatt, Phelps & Phillips, LLP, Co-Chair of Manatt’s Corporate Investigations & White Collar Defense practice and former Chief of the Environmental Crimes Unit and Assistant United States Attorney for the District of New Jersey.  Our interview with Wolff delved deeply into a wide range of relevant topics, including: special considerations applicable to training different categories of employees; when to train third parties; the role of outside counsel in training; the interaction between attorney-client privilege issues and candor during training; the risks of online training; appropriate training frequency; the role of hypotheticals; minimizing cost without sacrificing effectiveness; and training lessons from the November 2012 Guidance.  The prior installment in this series included our interview with Billy Jacobson, Senior Vice President, Co-General Counsel and Chief Compliance Officer of Weatherford International, the global oil and natural gas services company.  See “FCPA Training That Works: An Interview with Billy Jacobson, Chief Compliance Officer of Weatherford International,” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).  And the first installment in the series included our interview with Joseph Spinelli, the head of Navigant’s FCPA practice and former Inspector General of New York State.  See “FCPA Training That Works: An Interview with Joseph Spinelli, Global Leader of Navigant’s Anti-Bribery & Corruption-FCPA Segment,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • Complying with the FCPA: Mergers, Acquisitions and Investment Transactions (Part Two of Five)

    In light of the significant FCPA risk posed by cross-border transactions, The FCPA Report is serializing (in five parts) a chapter from a recently published treatise entitled The Foreign Corrupt Practices Act: Compliance, Investigations and Enforcement.  The authors of the treatise are Martin Weinstein, Robert Meyer and Jeffrey Clark, all partners at Willkie, Farr & Gallagher LLP, and highly-regarded members of the FCPA bar.  This issue contains the second installment in the series, which analyzes post-transaction risk, including the concept of willful blindness and the application of the FCPA’s accounting provisions to mergers and acquisitions.  The first part of the series provided an overview of the corruption liability inherent in M&A and investment transactions and provided insight on mitigation of corruption risk before transactions occur, focusing on successor liability, ratification, acts in furtherance of corruption and investment valuation.  See “Complying with the FCPA: Mergers, Acquisitions and Investment Transactions (Part One of Five),” The FCPA Report, Vol. 2, No. 8 (Apr. 17, 2013).

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  • 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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  • 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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