Most companies understand that they run afoul of the Foreign Corrupt Practices Act ("FCPA") if they pay bribes to foreign officials. But the caution with which most companies conduct their own operations does not always match the pratices at companies they plan to acquire. In the harried moments surrounding a new acquisition, it may be tempting for an acquiring company to defer inquiry into the on-the-ground practices of its target, or perhaps even turn a blind eye to a representation that seems too good to be true.

In this article, Lauren Randell and James Parkinson set forth the basic contours of the FCPA, then describe three FCPA enforcement actions in which improper conduct was discovered by an acquiring company either before or after the acquisition closed. Then they describe the eLandia-Latin Node deal in greater detail to identify (i) lessons that may be learned from that transaction, including potential indicators of FCPA risk, and (ii) actions M&A counsel may consider after discovering potential FCPA problems.

The article appeared in "Deal Points," the newsletter of the Committee on Mergers & Acquisitions (Vol. XV, Issue 1, Spring 2010).