Aggressive FCPA Enforcement Persists: Increased Activity, Along With Recent Legal Developments, Mandate that Companies Remain Vigilant

Enforcement of the U.S. Foreign Corrupt Practices Act continues to increase dramatically. The U.S. government is dedicating more resources to FCPA enforcement and bringing more enforcement actions than ever before. This increased anticorruption enforcement activity, along with recent developments in the law, mandate that private and public companies alike remain vigilant in their FCPA compliance efforts.

In recent years, the U.S. government has substantially increased the resources it dedicates to FCPA enforcement. In 2010, the U.S. Securities and Exchange Commission (SEC) opened a regional unit in San Francisco dedicated to FCPA enforcement. The FBI has also increased the number of agents dedicated to FCPA enforcement. In addition, the government has provided new incentives for private individuals to report suspected corrupt behavior. The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, includes a whistleblower program that rewards individuals who provide the SEC “original information” relating to an FCPA violation with up to 30 percent of any monetary sanctions collected by the SEC in excess of $1 million. The first wave of these cases is now making its way through the system.

The government has also signaled that it can and will use aggressive law enforcement techniques to enforce the FCPA. On Jan. 19, 2010, the FBI conducted a now-infamous raid on a trade show in Las Vegas, arresting 21 individuals. The raid followed an undercover sting operation in which FBI agents posed as officials from an African country and solicited bribes from the defendants in exchange for lucrative defense contracts. This was the first time the government had used an undercover sting to enforce the FCPA.

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Published In: Antitrust & Trade Regulation Updates, Criminal Law Updates, Finance & Banking Updates, International Trade Updates, Securities 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.

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