Mergers & Acquisitions and Anti-Corruption Compliance

more+
less-

As the economy improves and merger activity increases, it is important to remember the risks of FCPA liability when acquiring a company or entering into a joint venture.  Simply put, you don’t want to acquire an FCPA violation. 

Companies will sometimes rush to close a deal without conducting any due diligence — that is a recipe for disaster.  On the other hand, companies alert to the risks have been able to avoid successor liability altogether or, more frequently, to obtain assurance about the scope of potential FCPA liability before the transaction is complete.

Since an acquiring company may be held criminally liable for FCPA violations committed by the target company both before and after closing, pre-closing due diligence is critical to assessing risks and avoiding liability. Additionally, the party should request measures for good governance, accurate recordkeeping and anti-bribery efforts, seek audit rights, anti-corruption representations and written commitments to abide by anti-corruption laws; even if these requests aren’t honored, a record of such requests could help protect against or minimize FCPA exposure for the company. For joint ventures, the company can be held liable for the future conduct of the joint venture, but it depends on the governance proportion of the JV or majority company (e.g. board members, voting rights).

Please see full article below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Administrative Agency Updates, Business Organization Updates, Criminal Law Updates, International Trade Updates, Mergers & Acquisitions Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Michael Volkov, The Volkov Group Law Firm | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »