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, attorneys James Parkinson and Lauren Randell set forth the basic contours of the FCPA. They then describe three FCPA enforcement actions in which improper conduct was discovered by an acquiring company either before or after the acquisition closed. Finally, they discuss 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 and Acquisitions (Vol. XV, Issue 1, Spring 2010).
Firefox recommends the PDF Plugin for Mac OS X for viewing PDF documents in your browser.
We can also show you Legal Updates using the Google Viewer; however, you will need to be logged into Google Docs to view them.
Please choose one of the above to proceed!
LOADING PDF: If there are any problems, click here to download the file.