The Anti-Corruption Report

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

Recent Issue Headlines

Vol. 2, No. 16 (Aug. 7, 2013) Print IssuePrint This Issue

  • Best Practices for Reviewing Anti-Corruption Compliance Programs: Government Expectations, Scheduling and Staffing (Part One of Three)

    The recent joint DOJ/SEC Guidance reflects the government’s view that, in order to be effective, an FCPA compliance program must be periodically reviewed and improved.  However, neither the Guidance nor any other authority specifies how frequently such reviews should be conducted, how expansive such reviews should be or what steps companies should take to improve discovered shortcomings.  In the absence of concrete and authoritative direction on this topic, how should companies approach the ambiguous but critical task of reviewing and improving their compliance programs?  This article is the first in a three-part series addressing this question.  Specifically, this article discusses the importance of regular anti-corruption compliance reviews; details the government’s expectations about reviews; outlines how to create an efficient and effective compliance review schedule; and specifies how companies should staff their compliance reviews.  The second installment will discuss the biggest challenges companies face when conducting a review; what a company should consider when preparing for a review; how a company should prepare to perform a review; and what areas the review should address.  The third and final article in the series will provide strategies for conducting the actual review; discuss what a company should do post-review; outline issues surrounding documentation of the review; and examine how FCPA settlement agreements affect reviews.  See also “Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).

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  • Estimating Loss: When and How to Calculate and Disclose Financial Reserves for FCPA Settlements (Compendium of SEC Filings)

    When a public company is negotiating an FCPA settlement with the government, it must consider its concurrent obligation to set and publicly disclose a financial reserve for that settlement.  This raises various issues.  How early should a company set a reserve?  When should the company disclose that reserve?  What language should the disclosure include?  The FCPA Report has published a three-part series (see part onepart two and part three) addressing crucial issues companies face when considering whether and how to compute and disclose financial reserves for FCPA settlements.  With help from Intelligize’s database and search tools, The FCPA Report has also organized this long-form compendium of actual FCPA reserve-related disclosures from recent SEC filings to complement the series.  The disclosures are grouped based on when in the investigation the company established a reserve, as follows: (1) Reserve Disclosure Made During Early Discussions with the Government; (2) Reserve Disclosures Made During the Course of the Government Investigation; and (3) Reserve Disclosures Made on the Eve of Settlement.  These real-world examples of relevant disclosures can serve as precedents for counsel tasked with drafting or reviewing SEC filings when a company is considering setting a reserve in anticipation of an FCPA settlement.  To maximize the value of this compendium as a practice tool, this compendium also contains links to each of the filings discussed and quoted.

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  • Seven Lessons from China’s Bribery Investigation of GlaxoSmithKline 

    The Chinese government’s recent actions against employees of pharmaceutical giant GlaxoSmithKline plc in connection with possible commercial and government bribery have thrust the business practices of pharmaceutical and other health-related companies in China into the spotlight.  Speculation is growing that China may be increasing enforcement of its anti-bribery laws against a range of industries.  Chinese anti-bribery enforcement varies in important ways from U.S. enforcement.  Therefore, it is important for companies operating in China to understand what steps they can take to mitigate corruption risk, uncover and react to bribery by their employees and others, and be prepared for unannounced visits from Chinese regulators.  In a recent webinar, Shanghai-based K&L Gates partner Amy Sommers offered seven compliance and business lessons that companies can learn from GSK’s predicament.  See also “China Clarifies and Expands its Anti-Bribery Laws,” The FCPA Report, Vol. 2, No. 3 (Feb. 6, 2013).

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  • How Can Financial Services Firms and Employees Avoid FCPA Liability?

    The financial services industry has come under increasing scrutiny by the government in various areas, including anti-corruption.  See “Buyer Beware: Understanding and Mitigating Parent Company FCPA Liability in the Context of Private Equity Acquisitions,” The FCPA Report, Vol. 2, No. 15 (Jul. 24, 2013).  In May, for example, the DOJ and SEC brought charges against individuals at a broker-dealer alleging that the individuals paid bribes in connection with sales of financial services.  See “FCPA Charges against Broker-Dealer Stemming From Routine SEC Examination Is ‘Wake-Up Call’ to the Financial Services Industry,” The FCPA Report, Vol. 2, No. 10 (May 15, 2013).  Given this increased attention from the government, how can principals and employees of private equity firms, hedge fund managers, broker-dealers and other financial services firms – as well as their principals and employees – protect themselves?  What are the chief risk factors and the most effective precautions?  During a recent program hosted by Strafford Publications, Inc., Lara Covington, special counsel at Schulte Roth & Zabel LLP, addressed these and other questions.

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  • After a Protracted Battle About Reporting Requirements, Judge Leon Approves a $10 Million FCPA Settlement Between IBM and the SEC

    One of the most judicially contested civil settlements in FCPA history reached a conclusion on July 25, 2013, when U.S. District Judge Richard J. Leon of the U.S. District Court for the District of Columbia signed off on a $10 million agreement between IBM and the SEC.  The agreement resolves civil FCPA charges arising from IBM’s alleged bribery schemes in China and Korea.  The settlement agreement has been pending for more than two years, with Judge Leon accusing the SEC of “rolling over” during negotiation of the reporting requirements in the agreement, and warning IBM that if corruption problems arise in the future, it “won’t be a happy day.”  See also “Judge’s Refusal to Approve Civil FCPA Settlement Raises Concerns for Future FCPA Settlements with the SEC,” The FCPA Report, Vol. 2, No. 1 (Jan. 9, 2013); “District Court Judge Modifies Demands in Push for Stricter Judicial Review of Civil FCPA Settlements,” The FCPA Report, Vol. 2, No. 3 (Feb. 6, 2013).

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  • Dechert Produces Movie to Assist in FCPA and Corporate Governance Training

    The board of directors of a beleaguered company faces a vote on whether to acquire a new company with promise, and risk, in an emerging market.  It’s a serious, high-stakes situation faced by many boards.  It is the subject of many papers and seminars.  And it’s even the subject of training sessions in various media – but, Dechert LLP says, there has never been a training video like this.

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  • Claudius Sokenu Joins Shearman & Sterling

    Shearman & Sterling LLP has added experienced FCPA practitioner Claudius Sokenu to its ranks.  Sokenu joined Shearman as a partner on August 1, 2013 from Arnold & Porter LLP, where he practiced for five years after leaving a senior position at the SEC’s Enforcement Division.  He told The FCPA Report he will continue to focus on representing financial institutions, public companies and their executives before the SEC and the DOJ.  For insight from Sokenu, see The FCPA Report’s Guide to Disclosing Corruption Investigations in SEC Filings, Parts One, Two and Three.

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  • Steve Olson Returns to O’Melveny & Myers

    On August 1, 2013, O’Melveny & Myers LLP announced that Steve Olson has returned to the firm as a partner in the White Collar Defense and Corporate Investigations Practice, following two years of in-house legal work and government service.  Olson will resume his white collar and civil litigation practice in the firm’s Los Angeles office and counsel international companies on U.S. investments.

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