White Collar Crimes and Investigations Law Update - January 2012


In This Issues:


By now, most corporate officers know that the Foreign Corrupt Practices Act ("FCPA") was enacted for the purpose of discouraging bribery of foreign public officials. Indeed, the FCPA governs the actions of American corporations and those foreign corporations that have equity securities listed on any U.S. exchange. Given increased competition from foreign economies over the last fifteen years, the New York City Bar Association has recently taken the position that the statute places an undue burden on American entities that must try to comply while simultaneously fending off foreign competitors that are not subject to the FCPA's restrictions. Despite the enactment of similar legislation in other countries (and recent stepped-up enforcement elsewhere), the Association found that the statute fosters both a grossly competitive imbalance and an atmosphere that makes compliance so costly that some smaller businesses have (or are considering) withdrawing from foreign markets altogether.


In United States v. Park, the Supreme Court upheld the misdemeanor conviction of a "responsible corporate official", absent knowledge, intent (or even criminal negligence) based on his or her position of responsibility and authority to prevent and correct violations alone. The decision was profound because it potentially vanquished the requirement that one must generally have knowledge or intent to commit a crime before he or she may be forced to wear the "scarlet letter" of a criminal conviction. The conviction, rather, was based upon whether Park had the authority to detect, correct or prevent the violations. While the decision was indeed premised upon a discrete violation of the Food Drug and Cosmetic Act ("FDCA"), the Court did not limit its rationale to the Act itself and the application of the Park Doctrine -- creating " strict liability" offenses in other corporate endeavors—remains a clear and present danger.

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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.

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