Foreign Corrupt Practices Act Update: A Rare Jury Trial, Increased Resources by the Feds and a Novel Theory to Charge Upper-Management All Reaffirm the Need for Vigilance in Policing a Company's Inter


Following a six-week jury trial in Manhattan federal court, a Connecticut investor was found guilty of conspiracy to violate the Foreign Corrupt Practices Act ("FCPA"). The case is noteworthy because FCPA cases rarely go to trial and the post-trial comments of the jurors provide insight into the critical "due diligence" a company or individual needs to undertake to avoid FCPA investigations by the government.

According to the evidence at trial, the Connecticut investor, Frederic Bourke, participated in a scheme to bribe senior government officials in Azerbaijan with several hundred million dollars in shares of stock, cash and other gifts to ensure that those officials would privatize the State Oil Company of the Azerbaijan Republic ("SOCAR") in a rigged (and lucrative) auction that only Bourke, his friend (a Czech investor named Viktor Kozeny), and members of their investment consortium could win (the President of Azerbaijan issued a decree directing SOCAR's privatization). According to the charges, beginning in August 1997 through fall 1998, Kozeny, Bourke and others conspired to pay millions of dollars worth of bribes to Azeri government officials to ensure that their investment consortium would gain, in secret partnership with the Azeri officials, a controlling interest in SOCAR and its substantial oil reserves.


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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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