The FCPA Report

The definitive source of actionable intelligence covering the Foreign Corrupt Practices Act

Articles By Topic

By Topic: Self-Reporting

  • From Vol. 6 No.5 (Mar. 15, 2017)

    There’s a Problem, Now What? Richard Smith of Quinn Emanuel Discusses Framing Voluntary Disclosure to Minimize Cost and Maximize Credit 

    Once a company has made the difficult decision to report possible corruption to authorities, it is faced with several questions. When should that call be made? To which agency should it report? What should it be doing in terms of investigation and remediation in the meantime? Richard Smith, a partner at Quinn Emanuel and former prosecutor, recently discussed this difficult moment for companies with The FCPA Report, and offered suggestions on how companies can limit the scope of their investigation and gain maximum cooperation credit. See “There’s a Problem, Now What? Philip Urofsky of Shearman Explains the Logistics of Self-Reporting” (Sep. 14, 2016).

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  • From Vol. 6 No.1 (Jan. 18, 2017)

    Jay Holtmeier of WilmerHale Discusses What’s to Come After a Blockbuster Year of FCPA Enforcement

    By the numbers, 2016 was an epic year for FCPA enforcement, witnessing more than 50 settlements with corporate fines exceeding $2 billion. Those numbers were not the only notable aspect of enforcement, as both the SEC and DOJ placed greater emphasis on compliance programs and cooperation with foreign authorities. The future of FCPA enforcement, however, is in flux with the beginning of a new administration. The FCPA Report recently spoke with Jay Holtmeier, a partner at WilmerHale, to discuss the changes 2016 brought and what we can expect in 2017 and beyond. On February 1, 2017, Holtmeier will be chairing a full-day CLE program on the FCPA hosted by Strafford in New York City and online. A 50 percent event discount code is available for FCPAR subscribers inside this article. For previous insights from Holtmeier, see “Regional Risk Spotlight: Jay Holtmeier of WilmerHale Explains How to Navigate Bureaucratic Corruption Risks in India” (Sep. 23, 2015).

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  • From Vol. 5 No.25 (Dec. 21, 2016)

    Government and Defense Bar Perspectives on the New Weapons in the FCPA Arsenal

    The SEC and DOJ have new weapons in their arsenal to fight corruption. Increased personnel, coordinated global investigations and new forms of settlement are changing the face of FCPA enforcement, officials said during ACI’s 33rd International Conference on the FCPA in Washington, D.C. The FCPA Report talked to defense lawyers to gauge their reaction to the government’s statements, and how the government’s enforcement approach affects the advice they give companies. See our coverage of last year’s ACI panel, “Top FCPA Enforcers Discuss Evolving and Diverging Enforcement Approaches and the Defense Bar Responds” (Dec. 2, 2015).

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  • From Vol. 5 No.24 (Dec. 7, 2016)

    Ceresney and Yates Continue to Stress Individual Accountability, Voluntary Reporting and Cooperation

    Individual accountability is “a core value of our criminal justice system that perseveres regardless of which party is in power,” Deputy Attorney General Sally Q. Yates said at ACI’s recent FCPA conference, adding that she therefore expects the DOJ’s focus on individual accountability to continue into President-Elect Trump’s administration. She and Andrew J. Ceresney, the Director of the SEC Division of Enforcement, each delivered keynote addresses at the conference, emphasizing the DOJ and SEC’s focus on individual accountability and reiterating the now-familiar theme of the benefits of voluntary disclosure and cooperation. They spoke on the growing trend of international cooperation and what to expect from the new administration when it comes to anti-corruption enforcement. See “Yates on the Yates Memo” (May 18, 2016).

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  • From Vol. 5 No.19 (Sep. 28, 2016)

    What Compliance Lessons Can Companies Learn From the SFO’s First Two DPAs?

    In July 2016, the U.K.’s Serious Fraud Office received court approval for its second-ever DPA. Both this DPA and the one before it, involving Standard Bank, are stark demonstrations of the fact that violating the U.K. Bribery Act can have serious and expensive ramifications not only for the offending company but also for others in its corporate group, even if they were unaware of the bribery. They also serve as another reminder of the dangers of using agents to win business. In a guest article, Matthew Getz and Prateek Swaika, partner and associate, respectively, at Boies, Schiller & Flexner, consider some of the lessons to be learned in this context, and what companies operating in the U.K. should do to avoid incurring liability when using agents to enter into contracts. See also “In Second DPA, SFO and U.K. Court Focus on Cooperation, Self-Reporting and Compliance” (Aug. 31, 2016).

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  • From Vol. 5 No.18 (Sep. 14, 2016)

    There’s a Problem, Now What? Philip Urofsky of Shearman Explains the Logistics of Self-Reporting

    Making the decision to self-report can be agonizing, as can a government investigation. But what happens in the interim? Once a company has identified an anti-corruption issue, conducted a preliminary investigation and determined that alerting the authorities may be prudent, how should it go about actually self-reporting? In a recent conversation, Philip Urofsky, a partner at Shearman & Sterling, walked us through the steps of self-reporting and discussed several ways companies can make the process as painless as possible. See “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (Part Two of Three) (May 4, 2016).

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  • From Vol. 5 No.16 (Aug. 10, 2016)

    LATAM’s Delayed Self-Report and Inadequate Remediation Result in FCPA Fine Above Sentencing Guideline Minimum

    LATAM Airlines Group, along with its predecessor-in-interest LAN Airlines, has agreed to pay more than $22 million in penalties and disgorgement in order to settle allegations of books and records violations related to a union dispute in Argentina. Despite the lack of bribery allegations, the company paid a hefty penalty to the DOJ based on its failure to self-report the conduct in a timely manner or adequately remediate. Among the company’s remedial failures, the DOJ cited a lack of employee discipline, likely referencing the company’s CEO, who entered into a settlement with the SEC over the same conduct but remains in his position. See “CEO of LAN Airlines Settles FCPA Charges With SEC Over Union Dispute” (Feb. 10, 2016).

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  • From Vol. 5 No.15 (Jul. 27, 2016)

    Could Johnson Controls Have Prevented the Flagrant Circumvention of Its Revamped Compliance Program?

    Johnson Controls (JCI) has agreed to pay $14 million to resolve SEC charges that employees of its subsidiary China Marine undermined the company’s revamped internal controls systems to make payments to sham vendors. Nicholas Berg, a partner at Ropes & Gray, said that “the Chinese subsidiary’s employees appear to have engaged in a carefully orchestrated effort to evade those controls in a way that was extremely difficult to detect.” Notably, China Marine was being supervised by a monitor in connection with a prior FCPA settlement both at the time it was acquired by JCI and when the illicit actions occurred. The DOJ announced its decision not to prosecute by publicly releasing a letter it sent to JCI, the third such letter since the implementation of the Pilot Program. The settlement highlights compliance issues, including the proper design of risk-based controls and internal reporting incentives. It also raises enforcement questions such as how long a company can wait to self-report under the Pilot Program and whether the DOJ had a case against JCI. See “Using the FCPA Pilot Program’s Remediation Requirements to Build a Best-in-Class Compliance Program” (May 18, 2016).

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  • From Vol. 5 No.12 (Jun. 15, 2016)

    How Nortek and Akamai Escaped SEC and DOJ Prosecution for Chinese Bribery

    Nortek, a home security and ventilation manufacturer, and Akamai Technologies, a cloud services provider, have entered into non-prosecution agreements with the SEC in unrelated cases, after each company self-reported corruption at subsidiaries in China. Nortek will pay about $320,000 and Akamai will pay about $670,000 to resolve the matters. The DOJ also issued letters indicating that it will decline to prosecute both companies. Together with the NPAs, these declinations are widely seen as a signal from the government that self-reporting, cooperation and remediation can net a company more than just a penalty discount. We explore the settlements and what lies behind them. See The FCPA Report’s three-part series on the DOJ’s Pilot Program “Going Deep on the Fraud Section’s FCPA Pilot Program” (Apr. 20, 2016); “How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting?” (May 4, 2016); and “Earning Cooperation Credit Under the Fraud Section’s FCPA Pilot Program” (May 18, 2016).

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  • From Vol. 5 No.11 (Jun. 1, 2016)

    SEC’s Brockmeyer, DOJ’s Kahn Discuss Recent FCPA Enforcement Trends

    So far, 2016 has been an eventful year in FCPA enforcement. During a recent PLI panel, the SEC’s Kara N. Brockmeyer and the DOJ’s Daniel S. Kahn shared their perspectives on the DOJ pilot program, the Yates Memo, voluntary disclosures, individual accountability, cooperation among regulators, internal investigations and commercial bribery. The panel also featured insights on the enforcement climate from private practitioners Charles E. Duross and Lucinda A. Low. See also The FCPA Report’s three-part series on the pilot program: Part One (Apr. 20, 2016); Part Two (May 4, 2016); and Part Three (May 18, 2016).

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  • From Vol. 5 No.9 (May 4, 2016)

    How Will the Fraud Section’s Pilot Program Change Voluntary Self-Reporting? (Part Two of Three)

    Over the last year, the DOJ has made a number of policy statements that make it abundantly clear that it wants companies’ help in identifying and prosecuting corruption. The Yates Memo and changes to the U.S. Attorneys’ Manual drove home the Department’s focus on prosecuting individuals. Its recent announcement of a pilot program, specific to the Fraud Section’s FCPA Unit, underlined the Department’s desire for companies to come forward and self-report FCPA violations. As discussed in the first article in this three-article series, while the program may not represent much of a change in enforcement, it was meant to increase transparency on how prosecution and settlement decisions are made within the FCPA Unit. However, several aspects of the program and the related guidance fail to clear up concerns companies have raised in the past and, in some instances, introduce greater confusion. The FCPA Report spoke with former DOJ prosecutors to get their insights on this uncertainty and how the pilot program might – or might not – change a company’s self-disclosure calculus. See “Ceresney and Caldwell Remarks Highlight New SEC Self-Reporting Policy, Cooperation, Remediation and Transparency” (Dec. 2, 2015).

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  • From Vol. 5 No.8 (Apr. 20, 2016)

    Going Deep on the Fraud Section’s FCPA Pilot Program (Part One of Three)

    The DOJ recently announced several changes to criminal FCPA enforcement that could shake up the anti-corruption space. At a press conference, Leslie R. Caldwell, Assistant Attorney General of the DOJ Criminal Division, explained that the changes represented “enhancements to our FCPA prosecution program in the Fraud Section here at the Criminal Division.” In order to evaluate the impact of these changes, The FCPA Report spoke with five former DOJ prosecutors who offered extensive analysis on the implications for companies. In this first article in a three-article series about the DOJ’s announcement, we unpack what is happening at the Fraud Section and to what extent it represents a change from previous practice. The second article in the series will examine the areas of uncertainty that remain for companies and how those uncertainties might alter incentives to self-report. The final article will discuss how the Pilot Program might impact companies cooperating witht the DOJ during an investigation. See previously “How Will the Yates Memo Change DOJ Enforcement?” (Part One of Two) (Sep. 23, 2015); Part Two (Oct. 7, 2015).

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  • From Vol. 4 No.25 (Dec. 2, 2015)

    Ceresney and Caldwell Remarks Highlight New SEC Self-Reporting Policy, Cooperation, Remediation and Transparency

    The government’s keynote speeches at ACI’s recent FCPA Conference featured familiar tunes, but a few of the lyrics were new.  Andrew J. Ceresney, the Director of the SEC Division of Enforcement, and Leslie R. Caldwell, Assistant Attorney General of the DOJ Criminal Division, offered their views on their respective agency’s recent FCPA enforcement activity, focusing, as they usually do, on the benefits of self-reporting, cooperation and remediation by companies that discover misconduct.  Ceresney made an announcement about a new SEC policy regarding self-reporting and promised aggressive enforcement.  Meanwhile, Caldwell opined on the Yates memo and its effect on internal investigations and promised to continue increasing transparency.  For coverage of Ceresney and Caldwell’s speeches during the 2014 ACI program see “Caldwell and Ceresney Push Companies on FCPA Compliance, Cooperation and Self-Reporting,” The FCPA Report, Vol. 3, No. 24 (Dec. 3, 2014).

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  • From Vol. 4 No.23 (Nov. 4, 2015)

    Former DOJ Prosecutors Weigh In on Self-Reporting, Individual Prosecutions, International Cooperation and Enforcement Tactics

    Two former FCPA prosecutors who have moved to the other side of the table recently offered their candid views from the trenches of FCPA enforcement.  They discussed hot topics including whether the DOJ is targeting foreign companies, how international cooperation affects enforcement and how effective the government really is at evaluating compliance programs.  The former prosecutors also opined on the voluntary disclosure calculus, whether the Yates memo will increase individual prosecutions, how companies should “follow the money” to strengthen internal controls, and more.  The panelists, Nathaniel Edmonds, now a partner at Paul Hastings, and Stephen Spiegelhalter, now a principal in the Fraud Investigations & Dispute Services practice at EY, spoke during a panel at the recent SCCE Compliance and Ethics Institute in Las Vegas.

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  • From Vol. 4 No.20 (Oct. 7, 2015)

    How Will the Yates Memo Change DOJ Enforcement? (Part Two of Two)

    Last month, Deputy Attorney General Sally Quillian Yates issued a memo to all United States Attorneys outlining “six key steps” designed to strengthen the DOJ’s “pursuit of individual corporate wrongdoing.”  The FCPA Report spoke to three former DOJ attorneys about how the Yates Memo may affect companies and their compliance programs.  The first article in this two-part series assessed how much of a policy shift the Yates Memo truly represents and how it may affect a target’s decision to cooperate with the government.  This second article focuses on two other major issues raised by the Memo: (1) the directive to gather information about individual culpability earlier and (2) a possible increase in the number of civil actions brought against individuals.  It also discusses whether companies should reconsider their internal investigation procedures. See also “FCPA Enforcement Officials and Defense Bar Debate FCPA Policy,” The FCPA Report, Vol. 4, No. 12 (Jun. 10, 2015).

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  • From Vol. 4 No.19 (Sep. 23, 2015)

    How Will the Yates Memo Change DOJ Enforcement? (Part One of Two)

    Under pressure to hold individuals accountable, the DOJ says it will be intensifying its focus on individuals by taking six key steps during investigations.  Deputy Attorney General Sally Quillian Yates issued a memo to all U.S. Attorneys outlining the steps she says will strengthen the DOJ’s pursuit of corporate wrongdoing.  Former DOJ attorneys talked to The FCPA Report about the implications of what the DOJ is characterizing as a policy shift.  The first article in this two-part series discusses the extent to which the memo may change the enforcement climate and the cooperation calculus for companies and individuals.  The second part addresses how focusing on individuals earlier in the investigations and the increased coordination of efforts between the DOJ’s civil and criminal divisions may affect internal investigations.  See “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 4 No.16 (Aug. 5, 2015)

    Dissecting Mead Johnson’s $12 Million Chinese Baby Formula Bribe Settlement

    In the fifth FCPA enforcement action this year brought only by the SEC, Mead Johnson has agreed to pay $12.03 million to settle charges that its Chinese subsidiary created a slush fund with distributor discounts and used that money to bribe health care practitioners to recommend its baby formula and collect marketing information about new mothers.  The case is the latest in a line of Chinese health care FCPA enforcement actions, which may be taking on new life after the Chinese GSK case, Marc Alain Bohn, counsel at Miller & Chevalier, told The FCPA Report.  We discuss the case and the compliance lessons, including the ramifications of Mead Johnson’s failure to self-report, and why the DOJ has reportedly declined to bring a parallel action.  See also “What Does the PetroTiger Case Mean for FCPA Compliance?  Sigelman’s Attorneys and Other Experts Weigh In,” The FCPA Report, Vol. 4, No. 13 (Jun. 24, 2015).

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  • From Vol. 4 No.14 (Jul. 8, 2015)

    Government Officials and Defense Bar Offer Insights on FCPA Enforcement, Voluntary Disclosure and Cooperation

    Companies should anticipate that the government will continue to reward self-reporting and cooperation, and that the SEC will routinely seek disgorgement, even when a company self-discloses, enforcement officials said at the Securities Enforcement Forum West 2015.  Along with members of the FCPA defense bar, they discussed the trajectory of FCPA enforcement and offered advice on how companies can receive the most cooperation credit possible.  See also “FCPA Enforcement Officials and Defense Bar Debate FCPA Policy,” The FCPA Report, Vol. 4, No. 12 (Jun. 10, 2015).

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  • From Vol. 4 No.5 (Mar. 4, 2015)

    $16 Million Goodyear SEC Settlement Highlights M&A Risks and Subsidiary Liability

    Goodyear Tire & Rubber Company has agreed to pay $16 million to settle civil FCPA charges, resolving allegations that it failed to detect more than $3.2 million in improper payments made by its Kenyan and Angolan subsidiaries.  The SEC says that due diligence failures relating to the acquisition of the Kenyan subsidiary and weak internal controls allowed the bribery to occur unchecked.  Goodyear received credit for self-disclosure, cooperation and remediation.  “Goodyear did very well,” Robert Appleton, a partner at Day Pitney, told The FCPA Report.  The company “got the best result I think it could have hoped for,” he said.  See also “Seven Issues to Address When Performing Pre-Acquisition Due Diligence,” The FCPA Report, Vol. 2, No. 23 (Nov. 20, 2013).

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  • From Vol. 3 No.25 (Dec. 17, 2014)

    Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In

    Selling your company’s business side on compliance; the key indicators of a successful compliance program; and the government’s view of M&A risks were all on the agenda of the FCPA enforcement officials' annual fireside chat with the FCPA defense community.  SEC Chief Kara Brockmeyer (FCPA Unit, Enforcement Division), and DOJ Deputy Chief Patrick Stokes (Fraud Section of Criminal Division) were both on hand for the “year in review” discussion at American Conference Institute’s recent International Conference on the Foreign Corrupt Practices Act.  The FCPA Report discussed the regulators’ presentation with prominent defense practitioners, who provided a few caveats to the regulators’ pronouncements.  In our previous issue, we covered Stokes’ and Brockmeyer’s discussion of enforcement priorities and the defense bar’s reaction.  Our coverage of last year’s “year in review” panel can be found here and here.

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  • From Vol. 3 No.24 (Dec. 3, 2014)

    Caldwell and Ceresney Push Companies on FCPA Compliance, Cooperation and Self-Reporting

    Reinforcing familiar messages, senior government officials at the SEC and DOJ said the FCPA continues to be a priority and self-reporting and cooperation count a lot towards the mitigation of penalties.  Speaking at American Conference Institute’s recent International Conference on the Foreign Corrupt Practices Act, Assistant Attorney General Leslie R. Caldwell and the Director of the SEC Division of Enforcement Andrew Ceresney described the government’s focus going forward in each of their keynote speeches, including focusing on prosecuting individuals; the strengthening of the Kleptocracy Initiative; and increasing international cooperation.  The FCPA Report synthesizes their speeches here and also in this issue presents private practitioners’ takeaways from the government's "Year in Review" presentation at the conference.  See also “In Final Speech as Criminal Division Head, Mythili Raman Emphasizes DOJ’s Focus on Anti-Corruption Efforts, Highlighting Individual Convictions and Foreign Cooperation,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.18 (Sep. 10, 2014)

    Compliance Experts from Altria, Noble Energy and HP Share Corruption Investigation Best Practices

    A recent American Bar Association program brought together compliance executives from several public corporations to discuss how to both satisfy the client and mollify the government during an anti-corruption investigation – no easy task.  The panelists, along with moderator Mara V.J. Senn, a partner at Arnold & Porter, shared insights and experiences on preparedness for internal investigations, the role of outside counsel, the calculus of voluntary disclosures and a number of other common issues faced by companies conducting internal investigations.  For more from Senn on internal investigations, see “How to Conduct an Anti-Corruption Investigation: Ten Factors to Consider at the Outset (Part One of Two),” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013); and “Developing and Implementing the Investigation Plan (Part Two of Two),” The FCPA Report, Vol. 3, No. 1 (Jan. 8, 2014).  

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  • From Vol. 3 No.17 (Aug. 20, 2014)

    Comparing and Contrasting Three FCPA Experts’ Advice on Negotiating FCPA Settlements

    The FCPA Report recently published a series of interviews with FCPA experts Larry Urgenson, Neil MacBride and John Buretta on best practices for negotiating FCPA settlements with the government.  Their views, drawn from their experience as prosecutors and defense counsel, at times converged and differed on salient points, such as the dynamic self-reporting calculus, how to avoid international double jeopardy and the best ways to make a presentation to the government.  Urgenson is a partner at Mayer Brown who has held key leadership positions at the DOJ; MacBride is a partner at Davis Polk and the former U.S. Attorney for the Eastern District of Virginia; and Buretta is a partner at Cravath, Swaine & Moore and a former top official in the DOJ’s Criminal Division who helped to author the DOJ/SEC FCPA Resource Guide.  We synthesize the highlights of their interviews.

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  • From Vol. 3 No.14 (Jul. 9, 2014)

    Strategies for Negotiating FCPA Settlements: An Interview with Laurence Urgenson, Mayer Brown Partner and Former DOJ Official

    When a company is facing FCPA charges, it may have the opportunity to directly influence the outcome of the government’s investigation – a monitor may be deemed unnecessary, lower fines may be agreed upon and prosecutions may even be avoided.  In an interview with The FCPA Report, Laurence Urgenson, a partner at Mayer Brown and former DOJ official, shared his advice to help companies and their advisors present the company’s case in the most favorable light possible.  Drawing on his extensive experience, Urgenson provided insight into the changing self-reporting calculus, the need for an international anti-corruption protocol and the best ways to make a presentation to the government.  See also “When and How Should Companies Self-Report FCPA Violations? (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); and Part Two of Two, Vol. 1, No. 2 (Jun. 20, 2012). 

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  • From Vol. 3 No.12 (Jun. 11, 2014)

    FCPA Compliance Strategies for Hedge Funds and Private Equity Firms

    Given today's investment environment, with an unabated government focus on the private fund industry and significant opportunities developing in emerging markets, private equity fund managers are hard-pressed to ignore corruption risks in their businesses.  Molo Lamken, together with The FCPA Report and The Hedge Fund Law Report, recently hosted a panel that addressed hot topics in FCPA enforcement and compliance for this industry.  The panelists, including outside and in-house counsel, discussed, among other things: the current FCPA enforcement climate for private equity and financial services firms; strategies for mitigating the risk associated with third parties and service providers in high-risk countries; handling facilitation payments; self-reporting violations; and the importance of continuously monitoring compliance programs.  See “Corruption Considerations for Private Fund Managers: An Interview with Molo Lamken Partner Justin Shur,” The FCPA Report, Vol. 3, No. 11 (May 28, 2014).

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  • From Vol. 3 No.9 (Apr. 30, 2014)

    FCPA Experts in the Public and Private Sector Share Seven Lessons from Recent Cases (Part Two of Two)

    At a recent panel discussion sponsored by the Knowledge Group, former senior FCPA prosecutors, a current SEC lawyer and an economist shared advice on various critical aspects of an internal anti-corruption investigation, including factors to consider at the outset, whether to voluntarily disclose the investigation to the government, how to handle reporting to multiple jurisdictions, and calculating the “benefit of the bribe” for penalty purposes.  The first article in this two-part series contained the seven lessons the panelists extracted from recent FCPA settlements and trends; the initial decisions that a company faces when it discovers a potential violation; and the role of whistleblowers in revealing potential violations. See also “Top DOJ and SEC Officials Discuss FCPA Enforcement Priorities and Mechanics,” The FCPA Report, Vol. 3, No. 7 (Apr. 2, 2014).

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  • From Vol. 3 No.7 (Apr. 2, 2014)

    Audit Committee Responsibilities Before, During and After Internal Investigations: Remediating and Disclosing the Investigation to the Government and the Public (Part Four of Four)

    The end of an internal investigation does not mean the end of work on the matter for a company and the audit committee.  When an internal corruption investigation is completed, “the board should have a full briefing as to the findings, along with recommendations as to what next steps the organization should take,” William Olsen, leader of the Global Investigations and Anti-Corruption Services group at Grant Thornton LLP, told The FCPA Report.  The board and the company must make a series of critical and difficult decisions relating to, among other things, voluntary disclosure to the government, remediation measures and public disclosures.  The role the audit committee should play in these issues can be hard to define.  The FCPA Report is publishing a four-part article series on audit committee responsibilities throughout an internal investigation. This final article in the series suggests best practices for an audit committee after the “meat” of the investigation is done, including whether and how to self-report and other crucial post-investigation decisions on remediation and SEC disclosures.  The first article in the series, “Five Steps to Take Before the Investigation Begins,” detailed the committee's responsibilities, the risks and liabilities it faces and steps it should take before the need to investigate arises. The second article, “Determining When and How to Proceed,” discussed vetting complaints for the audit committee, determining when an investigation is needed and who should lead the investigation. The third article, “Retaining Counsel, Gathering Information and Documenting the Investigation,” discussed what the company and audit committee should do when initiating an investigation; when the company should retain outside counsel and other experts; how the company should gather information relevant to the investigation; and whether and how the company should document the investigation.

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  • From Vol. 3 No.4 (Feb. 19, 2014)

    When Should a Company Voluntarily Disclose an FCPA Investigation?

    Once a potential FCPA violation is discovered, the question looms large: Should the company voluntarily report the internal investigation to the government?  The DOJ and SEC emphasize the importance of self-reporting, arguing that it can lead to credit for cooperation in a settlement and even the brass ring, a declination.  But a company may ask why it should report an issue that the agencies are unaware of, and indeed, may never discover absent self-disclosure.  This guest article by Joe D. Whitley and Jason R. Edgecombe, partner and associate, respectively, at Greenberg Traurig, describes the landscape and summarizes the risks and benefits of both disclosure and non-disclosure so that counsel and their clients can make educated decisions about what is in their best interest once an FCPA violation is discovered. See also “When and How Should Companies Self-Report FCPA Violations? (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012); Part Two of Two, Vol. 1, No. 2 (Jun. 20, 2012). 

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  • From Vol. 2 No.13 (Jun. 26, 2013)

    U.S. Attorney Loretta Lynch Discusses Morgan Stanley, Ralph Lauren and the Government’s View on Compliance Programs, Self-Reporting, Monitors and More

    Every year, multi-national companies spend great sums on anti-corruption compliance.  By building robust compliance programs, companies seek to decrease corruption and also to limit company liability if bribery occurs.  However, many companies struggle with not only creating and maintaining an effective compliance program, but also communicating that program to the government if there is a problem.  At a recent conference hosted by the Society of Corporate Compliance and Ethics, Loretta Lynch, U.S. Attorney for the Eastern District of New York, shared a prosecutor’s perspective on corporate compliance programs.  Lynch also provided insight into the government’s position on employee discipline, training, self-reporting and corporate monitorship, along with specific discussions of the Ralph Lauren and Morgan Stanley cases.  See also “Davis Polk Lawyers and Morgan Stanley Compliance Director Discuss DOJ’s Decision Not to Prosecute Morgan Stanley for FCPA Violations,” The FCPA Report, Vol. 1, No. 10 (Oct. 17, 2012); “SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting,” The FCPA Report, Vol. 2, No. 9 (May 1, 2013).

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  • From Vol. 2 No.11 (May 29, 2013)

    Top Government and Private FCPA Practitioners Discuss Global Enforcement, Self-Reporting, Facilitation Payments, M&A Due Diligence, Jurisdiction and NPAs

    It’s been a busy year in FCPA compliance and enforcement – including leadership changes at the DOJ; the SEC’s first-ever NPA; an apparent decline in enforcement actions followed by a recent upswing; a growing, active global anti-corruption community; a new Canadian anti-corruption regime; and increased emphasis on merger and acquisition due diligence in the private sector, among other things.  At a recent panel hosted by the Practising Law Institute during its “Foreign Corrupt Practices Act and International Anti-Corruption Law Developments 2013” program, distinguished FCPA lawyers in both the private and public spheres distilled the most important trends in the field – and sometimes disagreed about what they mean for both outside and in-house counsel who deal with anti-corruption issues.  Mark Mendelsohn, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP moderated the May 2, 2013 panel, with help from Richard Grime, a partner at O’Melveny & Myers LLP.  The panel was comprised of Roger Witten of WilmerHale and Danforth Newcomb of Shearman & Sterling LLP on the private side, and Jason Jones, Assistant Chief of the FCPA Unit, Fraud Section, Criminal Division at the DOJ, and Charles Cain, Deputy Chief, FCPA Unit, Division of Enforcement at the SEC, on the public side.

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  • From Vol. 2 No.10 (May 15, 2013)

    Insight from Top Companies and Practitioners on How They Are Addressing Current Anti-Corruption Issues, from Self-Reporting to Risk Assessments to Training

    The government has made it clear that complying with the FCPA does not, and should not, require companies to adopt a one-size-fits-all solution.  Each company must tailor its program to its unique business model.  Despite the individuality of each program, however, it is useful for a company and its advisors to understand how the company’s peers and competitors are ensuring FCPA compliance.  How much are companies spending on anti-corruption compliance?  What type of training program does each company find effective?  What percentage of companies invest in risk assessments?  A recent panel hosted by the Practising Law Institute provided answers to these questions and more.  Combining commentary from industry experts Mark Mendelsohn, partner at Paul, Weiss, Rifkind, Wharton & Garrison LLP, Alexandra Wrage, president of TRACE International, Inc., Raja Chatterjee, Global Head of the Anti-Corruption Group at Morgan Stanley, and Susan Ringler, Deputy General Counsel for Xylem Inc., as well as interactive audience polling of conference participants (including in-house counsel, outside counsel and compliance personnel), the panel provided unique insight into trends and patterns in the FCPA world.  The panel analyzed the difficult issues that arise when developing training programs, allocating anti-corruption compliance resources, conducting risk assessments, executing internal investigations and making voluntary disclosures.  See “Five Tools Every Chief Compliance Officer Needs for Effective FCPA Compliance: Title, Authority, Access, Budget and Culture (Part One of Two),” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).  See also The FCPA Report’s FCPA Training That Works series: Navigant’s Joseph Spinelli (Apr. 3, 2013); Weatherford’s Billy Jacobson (Apr. 17, 2013); Manatt Phelps & Phillips’ Jacqueline C. Wolff (May 1, 2013).

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  • From Vol. 2 No.9 (May 1, 2013)

    SEC’s NPA with Ralph Lauren, the Agency’s First Ever, Modifies the M&A Due Diligence Requirements Traditionally Included in DOJ DPAs, and Outlines Specific Actions That Constitute Effective Self-Reporting

    While implementing an enhanced FCPA compliance program in 2010, Ralph Lauren Corporation (RLC) unearthed a multi-year bribery scheme perpetrated through its Argentine subsidiary, P.R.L.-S.R.L.  RLC reported its findings to the SEC and DOJ within two weeks and cooperated fully with their subsequent investigations.  As a result, the SEC entered into its first-ever non-prosecution agreement (NPA) with RLC.  Simultaneously, the DOJ entered into a separate NPA with RLC.  RLC has agreed to pay aggregate disgorgement, interest and penalties of over $1.6 million, to cooperate further with the SEC and DOJ, to enhance its compliance program and take further remedial measures and to report back to the DOJ for two years.  This article summarizes the terms of those agreements which, among other things, evidence the potential benefits for companies that self-police, self-report and cooperate fully with the SEC and DOJ.  See also “SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics,” The FCPA Report, Vol. 2, No. 7 (Apr. 3, 2013).

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  • From Vol. 2 No.7 (Apr. 3, 2013)

    SEC’s FCPA Unit Chief and Top Practitioners Address the Role of Financial Controls in FCPA Compliance Policies, Internal Investigations, Self-Reporting and Related Topics

    In a recent panel discussion held at the New York City Bar, Kara Brockmeyer, Chief of the SEC’s FCPA Unit, and Mark Schonfeld, a partner at Gibson Dunn & Crutcher LLP, discussed the SEC’s role in civil FCPA enforcement from a private and public perspective.  The panel was moderated by Wayne Carlin, a partner at Wachtell, Lipton, Rosen & Katz.  The three experts shared useful insights regarding managing the costs of FCPA investigations, creating strong compliance programs, negotiating with the SEC and deciding whether to voluntarily disclose a violation to the government.

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  • From Vol. 2 No.6 (Mar. 20, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Three of Three)

    Resolving a government FCPA investigation is a costly proposition; if a company is required to retain a monitor, the costs skyrocket.  Companies can limit the burden of monitorship, however, by carefully vetting their monitor candidates and choosing a monitor that is business-minded, pragmatic and efficient.  This article details the specific characteristics a company should look for when choosing a monitor and discusses strategies for limiting the costs of monitorship.  The first article in this three-part series examined precedent, practice and trends in post-settlement FCPA reporting obligations; discussed the shift to less traditional forms of reporting; explained the process by which reporting obligations are created; and described the mechanics of the most intrusive types of reporting – traditional monitorship and self-reporting.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).  The second article in this series provided real-world examples of innovative reporting requirements and outlined strategies for negotiating the most beneficial reporting requirements possible.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Two of Three),” The FCPA Report, Vol. 2, No. 5 (Mar. 6, 2013).

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  • From Vol. 2 No.5 (Mar. 6, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part Two of Three)

    For many years, the world of post-settlement FCPA reporting requirements was black and white – companies were either required to submit to a multi-year independent compliance monitor or the settlement contained no reporting obligations at all.  Today, as companies develop innovative reporting requirements to satisfy the government, solutions are often found in the gray area.  Finding a customized solution to reduce potentially onerous reporting requirements is crucial, and this article, the second in a three-part series, provides five practitioner-approved strategies to do just that.  In addition to advising on negotiating post-settlement reporting requirements with the government, this article also discusses real-world examples of innovative reporting requirements.  The third article in the series will describe how to choose the best possible monitor and outline strategies for limiting the expenses of monitorship.  The first article in the series examined precedent, practice and trends in post-settlement FCPA reporting obligations; discussed the shift to less traditional forms of reporting; explained the process by which reporting obligations are created; and described the mechanics of the most intrusive types of reporting – traditional monitorship and self-reporting.  See “How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three),” The FCPA Report, Vol. 2, No. 4 (Feb. 20, 2013).

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  • From Vol. 2 No.4 (Feb. 20, 2013)

    How to Find a Business-Minded Compliance Monitor and Minimize Reporting Requirements When Negotiating an FCPA Settlement (Part One of Three)

    Looming large in every FCPA settlement negotiation with the government is the reporting requirements the company will be subject to going forward.  Historically, companies had only two options at the negotiating table – plead for no future reporting to be required or accept an onerous and expensive multi-year compliance monitorship.  Thanks, in part, to the increased sophistication of many in-house compliance programs, the government is embracing new and creative reporting obligations, leaving room for companies to negotiate tailored solutions.  How can companies negotiate an agreement that meets the government’s need to decrease recidivism while limiting the uncertainty, invasiveness and expense of extensive reporting requirements?  This article, the first in a three-part series, examines precedent, practice and trends in post-settlement FCPA reporting obligations; discusses the shift to less traditional forms of reporting; explains the process by which reporting obligations are created; and describes the mechanics of the most intrusive types of reporting: traditional monitorship and self-reporting.  The second article in this series will discuss real-world examples of innovative reporting requirements and recommend specific strategies companies can use to negotiate the most beneficial reporting requirements possible.  The third article will provide advice on choosing the best possible monitor and tactics for limiting the expenses of a monitorship.

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  • From Vol. 2 No.2 (Jan. 23, 2013)

    Specific Strategies from Goldman Sachs, Société Générale and Leading Law Firms on Conducting Cross-Border FCPA Investigations

    The considerable challenges posed by an internal FCPA investigation are compounded when that investigation involves a cross-border component – as it almost invariably does.  In-house and outside counsel in cross-border investigations must navigate legal regimes that often conflict (notably in the area of data privacy); divergent approaches to the attorney-client privilege; varying business and governance structures; and different languages and cultural mores.  Moreover, best practices in the area of cross-border investigations are not codified or neatly packaged; rather, they are a function of long and often arduous experience.  In an effort to identify and communicate some of those best practices, a seasoned panel of in-house and law firm lawyers convened in New York on January 15, 2013 for a panel hosted by Catalyst, an e-discovery services provider.  The panel was moderated by Vasu Muthyala, counsel at O’Melveny & Meyers LLP.  He was joined by Greg Andres, partner at Davis Polk & Wardell LLP; John Driscoll, Managing Director and Director of Litigation and Regulatory Affairs at Société Générale; Justin Shur, partner at Molo Lamken LLP; John Tredennick, Chief Executive Officer of Catalyst; and Christine Chi, Global Head of the Anti-Bribery Group at Goldman Sachs.  The panelists discussed, among other issues: major challenges facing companies performing cross-border investigations, including the differing notions of data privacy and attorney-client privilege in different regions and strategies for coordinating with multiple jurisdictions; tips for conducting a cross-border investigation, including when to retain outside counsel; and the dynamics of reporting, both obligatory reporting via a Suspicious Activity Report and voluntary disclosure, especially in the current whistleblower climate.

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  • From Vol. 1 No.14 (Dec. 12, 2012)

    Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part Two of Two)

    On November 14, 2012, the SEC and DOJ jointly issued long-awaited guidance on the FCPA (Guide or Guidance), spurred in part by the Organisation for Economic Cooperation and Development’s recommendation, and business pressures for more clarity about the FCPA and the government’s enforcement of it.  This article continues our extensive coverage of the Guidance and the practical implications of it, offering concrete suggestions to anti-bribery professionals on avoiding, handling and settling enforcement actions, conducting internal investigations and executing mergers and acquisitions.  This article – the second in a two-part series – uses input from leading FCPA experts to extract practical lessons from the Guide, including what it says about compliance programs and internal controls; whether the Guide sheds any light on what constitutes a facilitation payment and who constitutes a foreign official, and whether those distinctions are important; the Guide’s insight on third-party due diligence, successor liability and statute of limitations issues; and whether the Guide affects the self-reporting calculus.  The first article in this series addressed the backstory of the Guide and why it was issued; how companies and their counsel can use the Guide and the hypotheticals included in it; advice that can be distilled from the Guide on gifts, travel and entertainment; deficiencies in the Guide and which areas of the law remain unclear; and the highlights and lowlights of the Guide’s declination section.  See “Top Practitioners Analyze the DOJ & SEC FCPA Guidance (Part One of Two),” The FCPA Report, Vol. 1, No. 13 (Nov. 28, 2012).

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  • From Vol. 1 No.6 (Aug. 22, 2012)

    Compliance Implications of the Current Enforcement Climate: An Interview with Mike Koehler, the FCPA Professor (Part One of Two)

    The FCPA Report recently interviewed Mike Koehler, Assistant Professor at Southern Illinois University School of Law and author of the popular blog the FCPA Professor.  He has testified before Congress and written extensively about FCPA issues.  Professor Koehler previously was Assistant Professor of Business Law in the College of Business at Butler University, and before that was an attorney at Foley & Lardner LLP, where he conducted FCPA investigations on behalf of companies, negotiated resolutions to FCPA enforcement actions with government enforcement agencies and advised clients on FCPA compliance and risk assessment.  In the first part of our interview, which is included in this issue of The FCPA Report, Professor Koehler spoke about the long tail on FCPA violations and the “gray cloud” that hangs over companies once they self-report, and he questioned whether companies should self-report at all.  See also “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).  He also shared compliance advice in light of recent enforcement trends relating to facilitation payments, the “obtain or retain business” element of the statute and the definition of foreign officials.  In addition, Professor Koehler discussed compliance lessons arising out of the unique way the FCPA is enforced and the relative lack of judicial scrutiny of the statute.

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  • From Vol. 1 No.2 (Jun. 20, 2012)

    When and How Should Companies Self-Report FCPA Violations? (Part Two of Two)

    Companies and individuals frequently face the question of whether to self-report FCPA violations.  Generally, parties self-report where they expect that the “credit” received for doing so will outweigh the various detriments (e.g., revealing a legal violation that otherwise might have gone unnoticed, losing control of an investigation, etc.)  Accordingly, implicit in any self-reporting determination is an estimate of the value of credit to be obtained.  Parties making such an estimate are, at least in theory, assigning a value to anticipated credit, then discounting that credit by the likelihood of obtaining it.  In practice, however, quantifying the value of credit to be obtained for self-reporting FCPA violations is a challenging exercise.  Various categories of credit – declinations and dropping of charges, for example – are hard to quantify; and assigning probabilities to government action is an infamously imprecise errand.  So, what are companies and individuals considering self-reporting to do?  The answer is to think through the self-reporting calculus in a structured, methodical way – to approach such decision-making with a workable framework.  To assist our subscribers in doing so, we have provided the building blocks of such a framework in this two-part article series.  In particular, part one of this series: provided a detailed definition of self-reporting; discussed relevant precedent, including plea agreements, settlements, speeches and fines; identified six questions that a company must answer before deciding whether or not to self-report; highlighted three of the chief arguments in favor of self-reporting; and analyzed whether and how the value of self-reporting can be quantified.  See “When and How Should Companies Self-Report FCPA Violations (Part One of Two),” The FCPA Report, Vol. 1, No. 1 (Jun. 6, 2012).  This part two addresses: the risks inherent in self-reporting; the likely effect of new FCPA insurance products on self-reporting; the mechanics of self-reporting (e.g., timing, to whom, who decides, etc.); and the impact on self-reporting determinations of the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

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  • From Vol. 1 No.1 (Jun. 6, 2012)

    When and How Should Companies Self-Report FCPA Violations? (Part One of Two)

    A company that discovers an FCPA violation by one of its employees faces a fundamental question with potentially profound business consequences: Should the company self-report the violation to the government?  Generally, the rationale for self-reporting is that companies may receive “credit” for doing so, for example, reduced or eliminated sanctions.  However, in the uncertain world of self-reporting, there are no guarantees.  Whether a company receives credit at all, how that credit is measured and applied, whether that credit mitigates other risks arising out of the same violations – these and related questions are fact-specific, guided but not governed by precedent and practice.  In short, self-reporting is an inherently ambiguous process.  This is squarely at odds with the data-driven decision-making that corporate boards and management teams engage in, or at least aspire to.  Accordingly, corporate decision-makers and the in-house and outside lawyers who advise them have been groping for a reliable framework for thinking through self-reporting questions.  To date, no generally accepted framework has been forthcoming.  The purpose of this two-part article series is to fill that gap.  To do so, this article: provides a detailed definition of self-reporting; discusses relevant precedent, including plea agreements, settlements, speeches and fines; identifies six questions that a company must answer before deciding whether or not to self-report; highlights three of the chief arguments in favor of self-reporting; then discusses whether and how the value of self-reporting can be quantified.  The second article in this series will address: the risks inherent in self-reporting; the effect that new FCPA insurance products may have on self-reporting; the mechanics of self-reporting (e.g., timing, to whom, who decides, etc.); and the impact on self-reporting determinations of the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  The analysis in this article is a combination of proprietary domain expertise and extensive interviews with leading practitioners, who are quoted in depth.  In addition, this article contains numerous links to relevant documents and authority.  While this article cannot conclusively answer the question with which it opened – Should a company self-report an FCPA violation to the government? – it can help practitioners avoid missing a critical question or issue that should be part of a thorough analysis.

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