Diageo’s Settlement with the SEC: A Stocked Bar of FCPA Trends and Pitfalls


Last week, the Securities and Exchange Commission (the SEC) charged Diageo plc—one of the world’s largest producers and distributors of premium alcoholic beverages—with wide-ranging violations of the Foreign Corrupt Practices Act (the FCPA).

Although this case is one more in a long line of FCPA enforcement matters brought by the SEC and/or Department of Justice (DOJ) this year, it is notable because the findings of illegal activity read like a law school exam question. The case identifies many of the myriad ways that a company can violate the FCPA, and what a company can do to potentially minimize the sanctions sought by federal regulators to address those violations.

Review of the Diageo case will provide companies, their compliance professionals, and counsel with a description of the “hot button” FCPA enforcement trends and pitfalls that are the current focus of the regulators, including, among other things: (i) liability for the activities of subsidiaries, (ii) working with third-party agents and consultants, (iii) the risks of providing gifts and entertainment, (iv) working with “state owned enterprises,” (v) the requirement for transparent books and records, and (vi) the possible benefits of cooperating with the anti-corruption regulators.

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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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