The FCPA Report

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

Articles By Topic

By Topic: Kickbacks

  • From Vol. 5 No.5 (Mar. 9, 2016)

    Failure to Heed a CCO Whistleblower’s Warnings Leads to Olympus’ $646 Million Anti-Kickback, FCA and FCPA Settlement

    The DOJ’s recent settlement with medical-device distributor Olympus demonstrates that corruption is not confined to emerging or high-risk markets. Rather, when a company fails to implement effective compliance measures, corruption can occur anywhere, even in the United States. From 2006 to 2011, Olympus Latin America (OLA) attempted to increase medical equipment sales in Central and South America by paying health care practitioners at government-run facilities more than $3 million. Simultaneously, in North America, Olympus employees were paying kickbacks to doctors and hospitals. The charges against Olympus resulted from a False Claims Act lawsuit filed by its former chief compliance officer who allegedly first-reported the claims internally – Olympus executives apparently failed to heed his warnings. See “Whistleblower Advocate and Experts at Gibson Dunn Discuss the Current State of the Dodd-Frank Whistleblower Program” (Jan. 13, 2016).

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  • From Vol. 1 No.2 (Jun. 20, 2012)

    Watts Water Technologies Sues Sidley Austin LLP for Malpractice Arising out of Alleged Failure to Reveal Chinese Target Company’s Written “Kickback” Policy

    In 2002, Watts Water Technologies, Inc. (Watts) retained global law firm Sidley Austin, LLP (Sidley) to advise it in connection with its operations in the People’s Republic of China (PRC).  From 2004 to 2005, Sidley conducted due diligence on a company Watts proposed to acquire in the PRC.  Sidley did not raise any red flags about FCPA compliance.  After the acquisition, Watts learned that the acquired company’s sales policies violated the FCPA.  Watts self-reported the problem to the DOJ and the SEC.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” above, in this issue of The FCPA Report.  It eventually consented to the entry of a cease-and-desist order by the SEC, whereby it disgorged $3.57 million in profit and paid a $200,000 fine.  Watts has now sued Sidley for malpractice, claiming that Sidley neglected to tell Watts of the target’s written “kickback” policy that Sidley had received during due diligence.  This article details the factual allegations and legal claims in Watts’ Complaint.

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