The Anti-Corruption Report

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

Recent Issue Headlines

Vol. 2, No. 19 (Sep. 26, 2013) Print IssuePrint This Issue

  • When and How Companies Should Include FCPA Risk Disclosures in SEC Filings (Part One of Three)

    When, if ever, should a multi-national, publicly traded company discuss its FCPA risks in the “Risk Factors” section of its 10-K, 10-Q or offering prospectus?  Is such disclosure, before there is an FCPA violation on the company’s radar, necessary or prudent?  If a company does disclose FCPA risks, what should it be telling regulators and the public about those risks in its filings?  FCPA experts are sharply divided on whether the benefits outweigh the disadvantages of such disclosure.  Guidance from the government is scarce and hard to discern.  To help shed light on this controversial but critical issue, The FCPA Report is publishing a multi-part series addressing the strategy and mechanics of disclosure of FCPA risk in the Risk Factors section of SEC filings.  This article, the first in the series, discusses the SEC rules governing such disclosure and the evolution of the disclosure of risk factors related to international operations.  It also examines both sides of the debate as to whether such disclosure is necessary and prudent.  For more on disclosing corruption investigations in SEC filings, see The FCPA Report’s Guide on that topic – Parts One, Two and Three, and the compendium of relevant disclosures in Part Four.

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  • Conducting Effective Anti-Corruption Due Diligence on Third Parties: An Interview with Principals at Nardello & Co.

    Most companies doing business multi-nationally must engage third parties to operate on the company’s behalf overseas, but in the current anti-corruption landscape, third parties can be a necessary evil.  Under the FCPA, a company can be held responsible for any improper payments made on its behalf by a third-party agent or partner, and many recent FCPA enforcement actions by the SEC and DOJ have involved the actions of third parties.  To best protect themselves from the risks associated with retaining third parties, companies must devote significant resources to the critical and complicated task of conducting due diligence.  How should a company efficiently allocate its due diligence resources?  How can a company effectively gather information in challenging jurisdictions?  What should a company do if it does not wish to inform a prospective agent that it is conducting due diligence?  The FCPA Report is publishing a series of interviews with experts from different disciplines on best practices for conducting anti-corruption due diligence on third parties.  This article, the second in the series, includes our interview with Nardello & Co.’s FCPA team: Daniel Nardello, Tara MacMillan, Nicholas Peck and Michael Ramos.  Nardello, MacMillan, Peck and Ramos are all seasoned investigators with extensive experience in anti-corruption initiatives.  Nardello and Ramos also both formerly served as prosecutors in the Southern and Eastern Districts of New York, respectively.  The first article in the series contained an interview with Alice Fisher, a partner at Latham & Watkins and former head of the Criminal Division at the DOJ.

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  • A Comparison and Examination of DOJ Compliance Program Requirements in FCPA Settlement Agreements

    While the government has not explicitly enumerated the elements of a best-in-class FCPA compliance program, it has done so implicitly, via settlement agreements and the recent FCPA Resource Guide.  The DOJ and SEC often require settling companies to implement specific compliance policies and procedures listed in Deferred Prosecution or Non Prosecution Agreements.  Those requirements, most recently embodied in “Attachment C,” can be a gold mine of best practices for companies that know how to find such documents, how to read them in context, how to analogize the circumstances of the settlement to their own facts, and how provisions in the agreements have evolved over time.  The government’s view on best FCPA compliance practices is out there, but the information is disparate and difficult to digest.  To bring structure and coherence to this important area, and to enable our subscribers to act on it, The FCPA Report has undertaken a proprietary analysis of numerous settlement agreements released over the last five years.  The results of that analysis are reflected in the following chart, which presents 5 representative settlement agreements, analyzes each of the 15 compliance program provisions included in the settlement agreements, shows how those provisions have evolved over time, links to the full text of each settlement agreement and also links to articles from The FCPA Report offering a deeper dive on relevant provisions and concepts.

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  • Checklist of Actions to Take and Factors to Consider When Conducting Pre-Merger Anti-Corruption Due Diligence 

    Anti-corruption issues can undermine a merger or acquisition that otherwise would be successful on the economic merits.  Consequently, FCPA due diligence has become a critical component of overall M&A due diligence, and such diligence is not complete before comprehensive FCPA due diligence has been conducted on the target company.  But what constitutes comprehensive FCPA due diligence in connection with a transaction?  What high-level areas should acquirers or merger partners investigate?  What specific questions should they ask, and what should cause them to drill down and ask hard follow-ups?  Perhaps most importantly, what issues should cause a company to walk away from an otherwise meritorious transaction?  This checklist, drafted by Michael Gilbert and Mauricio España, partners at Dechert LLP, addresses these questions, and in the process, helps define the scope and increase the precision of transactional FCPA due diligence.  For more from Gilbert and España on this subject, see “Critical Steps to Take and Questions to Ask When Conducting Pre-Merger Anti-Corruption Due Diligence,” The FCPA Report, Vol. 1, No. 5 (Aug. 8, 2012).

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  • Saudi Businessman Sues White & Case for Documents in Lead Up to Case Against Barclays

    Wealthy Saudi businessman Mohamed bin Issa al Jaber and his company have filed a peititon in state court in New York against White & Case LLP seeking a confidential settlement agreement they allege is in that law firm’s possession.  The lawsuit is part of Jaber’s effort to establish a claim that Barclays Bank PLC conspired with certain officials of the Kingdom of Saudi Arabia to damage his business.  He alleges that he and his company are victims of Barclay’s tortious scheme involving bribery of foreign officials, and the settlement document is central to proving those allegations.

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  • Transparency International Report Finds That Poor Legislative Oversight of Defense Spending Increases Corruption Risk

    Legislative bodies in most countries have “seriously insufficient controls” that lead to “high or critical corruption risk.”  That is one of the findings of the Defence and Security Programme of Transparency International UK in its inaugural report on worldwide legislative oversight of defense expenditures.  The September 2013 report provides insight into how a country’s political structures and processes affect corruption risk in that country’s defense industry, providing valuable information for companies that do business in these countries.  This article highlights TI-UK’s key findings.

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  • Former Assistant U.S. Attorney Jonathan Schmidt Joins Ropes & Gray

    On September 23, 2013, Ropes & Gray LLP announced the addition of Jonathan Schmidt as counsel in its government enforcement practice group.  

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  • Leslie Caldwell Named to Fill Lanny Breuer’s Post as Head of the DOJ’s Criminal Division

    Leslie Caldwell has been nominated to serve as Assistant Attorney General for the Criminal Division of the DOJ.  She has been a partner at Morgan, Lewis & Bockius LLP since 2004, where she chairs the firm’s white collar practice.

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  • Duane Morris’ Philadelphia Office Adds FCPA Practitioner John C. Ryan As a Partner

    On September 16, 2013, Duane Morris LLP announced that John C. Ryan rejoined Duane Morris as a partner in the Philadelphia office.  He previously served as Senior Vice President and Deputy General Counsel of ARAMARK Corporation.

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