U.S. Department of Justice and Securities and Exchange Commission Issue Guide to Foreign Corrupt Practices Act Enforcement

2013 ◽  
Vol 107 (1) ◽  
pp. 227-228 ◽  
Keyword(s):  
Securities And Exchange Commission ◽  
Department Of Justice ◽  
Foreign Corrupt Practices Act

scholarly journals Coordinating Compliance Incentives

2018 ◽  
Author(s):  
Veronica Root
Keyword(s):  
Securities And Exchange Commission ◽  
Repeat Offenders ◽  
Department Of Justice ◽  
Coordination Problem ◽  
Public Companies ◽  
Foreign Corrupt Practices Act ◽  
Institutional Misconduct ◽  
Compliance Programs ◽  
Effective Compliance ◽  
Enforcement Authority

102 Cornell L. Rev. 1003 (2017)In today’s regulatory environment, a corporation engaged in wrongdoing can be sure of one thing: regulators will point to an ineffective compliance program as a key cause of institutional misconduct. The explosion in the importance of compliance is unsurprising given the emphasis that governmental actors—from the Department of Justice, to the Securities and Exchange Commission, to even the Commerce Department— place on the need for institutions to adopt “effective compliance programs.” The governmental actors that demand effective compliance programs, however, have narrow scopes of authority. DOJ Fraud handles violations of the Foreign Corrupt Practices Act, while the SEC adjudicates claims of misconduct under the securities laws, and the Federal Trade Commission deals with concerns regarding anticompetitive behavior. This segmentation of enforcement authority has created an information and coordination problem amongst regulators, resulting in an enforcement regime where institutional misconduct is adjudicated in a piecemeal fashion. Enforcement actions focus on compliance with a particular set of laws instead of on whether the corporate wrongdoing is a result of a systematic compliance failure that requires a comprehensive, firm-wide, compliance overhaul. As a result, the government’s goal of incentivizing companies to implement “effective ethics and compliance programs” appears at odds with its current enforcement approach. Yet governmental actors currently have the tools necessary to provide strong inducements for corporations to, when needed, engage in restructuring of their compliance programs. This Article argues that efforts to improve corporate compliance would benefit from regulatory mechanisms that (i) recognize when an institution is engaged in recidivist behavior across diverse regulatory areas and (ii) aggressively sanction institutions that are repeat offenders. If governmental actors adopt a new enforcement strategy aimed at “Coordinating Compliance Incentives,” they can more easily detect when an institution is suffering from a systemic compliance failure, which may deter firms from engaging in recidivist behavior. If corporations are held responsible for being repeat offenders across diverse regulatory areas, it may encourage them to implement more robust reforms to their compliance programs and, ultimately, lead to improved ethical conduct and more effective compliance programs within public companies.

The Oil Industry and Africa: The Expanding Reach of the Foreign Corrupt Practices Act

2011 ◽  
Vol 4 (3) ◽  
Author(s):  
Stuart H. Deming
Keyword(s):  
Special Reference ◽  
Developing World ◽  
Oil Industry ◽  
Securities And Exchange Commission ◽  
Department Of Justice ◽  
Foreign Corrupt Practices Act ◽  
The Us ◽  
Over Time

As a statute designed to deter improper inducements to foreign officials in connection with business activities, the enforcement of the Foreign Corrupt Practices Act (FCPA) has over time dramatically increased in its reach. This article examines the reach of the FCPA into Africa with special reference to corrupt practices in the oil industry. Owing to the combined enforcement activities of the US Department of Justice and the Securities and Exchange Commission, it concludes by arguing that the FCPA's impact and potency in the developing world will continue to grow.

scholarly journals Canadian Companies Beware: The U.S. Foreign Corrupt Practices Act Applies to You

1998 ◽  
Vol 36 (2) ◽  
pp. 455 ◽  
Author(s):  
Robert A. Bassett
Keyword(s):  
Securities And Exchange Commission ◽  
Department Of Justice ◽  
Foreign Corrupt Practices Act ◽  
The U.S

This article outlines how the U.S. Foreign Corrupt Practices Act applies to non-U.S. corporations and individuals, with particular reference to those entities in Canada. The author points out the dual requirements of the legislation — the accounting provisions and the anti-bribery provisions — and explains how the generous wording frequently makes them applicable to Canadian corporations and individuals, both directly and indirectly. Several cases are cited as examples of enforcement of the Act against non- U.S. corporations and individuals. The accounting provisions of the U.S. Securities and Exchange Commission are reviewed, as are the anti-bribery provisions of the U.S. Department of Justice.

A perfect storm: how high levels of risk and weak internal controls resulted in violations of the foreign corrupt practices act

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Diana Franz
Keyword(s):  
Oil And Gas ◽  
Oil And Gas Industry ◽  
International Markets ◽  
Internal Controls ◽  
Strategic Decision ◽  
Department Of Justice ◽  
Gas Industry ◽  
Foreign Corrupt Practices Act ◽  
Content Type ◽  
Perfect Storm

Theoretical basis This case is based on Weatherford International’s settlement with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ). Both the SEC and the DOJ were critical of Weatherford for its violations of the Foreign Corrupt Practices Act and for its “inadequate internal controls.” This case explores the Foreign Corrupt Practices Act (FCPA) violations and issues related to internal controls. Research methodology Case study. Case overview/synopsis This case is based on Weatherford International’s settlement with the SEC and the Department of Justice. Weatherford provided equipment and services in the oil and gas industry. Because international markets were growing faster than domestic markets, Weatherford made a strategic decision to pursue growth in international markets. The oil and gas industry has high levels of operating risk as did the countries that Weatherford decided to pursue operations in. However, despite the decision to take on additional risk, Weatherford failed to implement adequate systems of internal controls. The title of the case “A Perfect Storm” refers to Weatherford’s trifecta of operating in an industry with high levels of corruption risk, countries with high levels of corruption risk and failing to implement adequate internal controls despite those high operating risks (Department of Justice, 2013). Weatherford was ultimately assessed a $152m penalty for its violations of the FCPA that included bribery, volume discounts, improper payments and kickbacks. Complexity academic level Undergraduate and graduate auditing classes.

SEC flexes its muscle on accounting fraud and targets more individuals

2016 ◽  
Vol 17 (2) ◽  
pp. 50-53
Author(s):  
David Woodcock ◽  
Joan McKown
Keyword(s):  
Financial Reporting ◽  
Financial Services ◽  
Design Methodology ◽  
Securities And Exchange Commission ◽  
Internal Controls ◽  
Accounting Fraud ◽  
Department Of Justice ◽  
Content Type ◽  
Practical Guidance ◽  
A Priority

Purpose To note the increase in accounting and financial reporting matters at the Securities and Exchange Commission by highlighting a number of recent cases filed by the agency. Design/methodology/approach The SEC recently announced the settlement or filing of a number of significant accounting fraud cases. Coupled with recent statements by the SEC and the Department of Justice, it is clear that accounting fraud is a priority and that individuals are in the cross-hairs. This article discusses a few of the recent cases and the trend toward more financial reporting and issuer disclosure cases. Findings The number of financial reporting and issuer disclosure cases will likely continue to increase. Individuals will be targeted in more of those cases, internal controls will be a focus, whistleblowers will continue to be important in this area, and SOX 304 clawbacks will continue to be a weapon for the SEC. Originality/value Practical guidance from experienced securities and financial services lawyers.

scholarly journals The Ways of Corruption in Infrastructure: Lessons from the Odebrecht Case

2021 ◽  
Vol 35 (2) ◽  
pp. 171-190
Author(s):  
Nicolás Campos ◽  
Eduardo Engel ◽  
Ronald D. Fischer ◽  
Alexander Galetovic
Keyword(s):  
Department Of Justice ◽  
Foreign Corrupt Practices Act ◽  
Corruption Case ◽  
The Us ◽  
Construction Firm ◽  
Media Reports ◽  
The Cost

In 2016, the Brazilian construction firm Odebrecht was fined $2.6 billion by the US Department of Justice. It was the largest corruption case ever prosecuted under the US Foreign Corrupt Practices Act. Our examination of judicial documents and media reports on this case provides new insights on the workings of corruption in the infrastructure sector. Odebrecht paid bribes for two reasons: to tailor the terms of the auction in its favor, as well as to obtain favorable terms in contract renegotiations. In projects where Odebrecht paid bribes, costs increased by 70.8 percent on average, compared with 5.6 percent for projects with no bribes. We also find that bribes and profits made from bribing were smaller than documented in most previous studies, in the range of one to two percent of the cost of a project.

Settlement payouts will promote US whistle-blowing

2016 ◽  
Keyword(s):  
Securities And Exchange Commission ◽  
Class Action ◽  
Department Of Justice ◽  
Content Type ◽  
Whistle Blowing ◽  
Enforcement Action ◽  
Residential Mortgage ◽  
Mortgage Backed Securities ◽  
Limited Class ◽  
A Company

Significance The marked increase in 2015 expenses stems in part from Goldman's 5.1-billion-dollar settlement with the Department of Justice (DoJ) and various federal and state regulators announced on January 14 relating to the firm's securitisation, underwriting and sale of residential mortgage-backed securities from 2005 to 2007. On January 15, the Securities and Exchange Commission (SEC) announced a 700,000-dollar award to a whistle-blower, the first-ever such award to a company outsider for analysis that led to a successful enforcement action. Impacts The SEC's whistle-blower payout to an outsider may incentivise further 'bounty-hunting' against corporations by external experts. Business-friendly judicial decisions that have limited class action recoveries will not necessarily restrict whistle-blower claims. The salience of the Sanders campaign among primary voters skews post-election political headwinds against deregulation-friendly Democrats.

United States—Deconstructing the FCPA

2019 ◽  
pp. 3-10
Keyword(s):  
United States ◽  
Securities And Exchange Commission ◽  
Foreign Corrupt Practices Act ◽  
Corporate Compliance

In 1976, the Securities and Exchange Commission (SEC) issued its groundbreaking Report of the Securities and Exchange Commission on Questionable and Illegal Corporate Payments and Practices, which characterized the problem of corrupt and illegal corporate payments as “serious and widespread.” Enacted in 1977, the Foreign Corrupt Practices Act of 1977 (FCPA) prohibits corrupt payments of money or anything of value to foreign officials in order to obtain or retain business. The FCPA continues to serve as the world’s only true anti-bribery touchstone against which subsequent enactments can be compared textually. Adherence to the directives of the FCPA continues as one of the most prominent issues in corporate compliance. The consequences of a DOJ investigation for an organization can be substantial and attention-diverting, a settlement can be costly, and an indictment can be crippling.

scholarly journals Calculating Corporate Compliance & The Foreign Corrupt Practices Act

2019 ◽  
Vol 19 (1) ◽  
Author(s):  
Brian S. Haney
Keyword(s):  
Cost Efficiency ◽  
Analytical Framework ◽  
Department Of Justice ◽  
Foreign Corrupt Practices Act ◽  
Corporate Compliance ◽  
Doing Business ◽  
Compliance Programs ◽  
Firm Compliance ◽  
Cost Efficient ◽  
The Cost

Technology is rapidly disrupting every industry and institution around the globe. Yet, corporate compliance has remained relatively unaffected by technological change when compared to other industries. If firms continue to lag behind in their compliance efforts, their risk exposure to the potentially lethal sanctions associated with major compliance failures will continue to increase with time. This is particularly true in the context of the Foreign Corrupt Practices Act. Generally, the Foreign Corrupt Practices Act (“FCPA”) is a regulatory statute that forbids bribery and false accounting for domestic firms doing business abroad. And, in the past decade the DOJ and SEC have begun aggressively enforcing the FCPA. Firms should begin using technology to develop more robust and cost-efficient compliance programs to insulate themselves from the FCPA’s harsh penalties. This Article provides an algorithm that allows firms to evaluate and improve their compliance programs in accordance with several published sources of guidance. Compliance scholars have made clear that it is critical for firms to maintain strong corporate compliance programs and have suggested different models and frameworks for internal evaluation and auditing. However, those suggestions fail to consider how technology may be used to improve the cost-efficiency of corporate compliance and ethics programs. This Article takes an informatics-based approach to evaluating and improving firm compliance by focusing on the most important compliance functions according to the Department of Justice (“DOJ”), courts, and other Government actors. Indeed, firms may drastically improve the cost-efficiency of their compliance efforts by adopting the analytical framework proposed in this Article.

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