The FCPA Report

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

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By Topic: Discipline

  • From Vol. 5 No.25 (Dec. 21, 2016)

    Top FCPA Officials Encourage Strong Compliance Programs and Remediation, the Defense Bar Responds

    A year after the DOJ hired an in-house counsel to assist with assessing companies’ compliance programs, top enforcers at the DOJ, as well as the SEC, are touting the importance of compliance in anti-corruption resolutions. At ACI’s 33rd International Conference on the FCPA, recently held in Washington, D.C., federal regulators discussed the role Hui Chen is playing at the DOJ, how proactive remediation can lead to less harsh settlement terms and what the continued focus on individual accountability means for companies and their executives. The FCPA Report spoke to defense counsel for their reaction to the government’s statements. For additional coverage of the government speakers at this year’s conference, see “Ceresney and Yates Continue to Stress Individual Accountability, Voluntary Reporting and Cooperation” (Dec. 7, 2016).

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  • From Vol. 5 No.22 (Nov. 9, 2016)

    Employee Discipline and Internal Investigations After the Yates Memo

    Over the past year, the Department of Justice has reiterated and re-emphasized its focus on holding individuals accountable for corporate wrongdoing. For companies investigating potential FCPA violations, these mandates raise the stakes on the already complex issue of employee discipline. In a guest article, Paul Hastings partner Palmina M. Fava and her associate Mor Wetzler explain how companies must balance the need to promptly remediate and discipline wrongdoing with not depriving the company of access to employees before obtaining all of the facts needed to fully understand the issues. See “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. 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.14 (Jul. 13, 2016)

    Second Circuit Rules Employees May Be Fired for Refusing Internal Investigation Interview

    After the Yates Memo, which requires that a company under investigation disclose all information about individual wrongdoing to receive cooperation credit, individuals may be more likely to push back when asked to participate in internal investigations. What recourse do employers have if employees refuse to cooperate? A recent Second Circuit ruling “establishes a corporation’s right to ‘assume the worst’ and fire an employee who declines to sit for an interview, if and when the corporation has a reasonable basis to suspect the employee engaged in criminal conduct,” Juan Morillo, a partner at Quinn Emanuel, told The FCPA Report. We analyze the decision, Gilman v. Marsh & McLennan Co., Inc., and the questions it raises. See also “Internal Investigations and Criminal Discovery After the Yates Memo” (Apr. 6, 2016).

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  • From Vol. 3 No.11 (May 28, 2014)

    Three Questions to Ask After Detecting a Possible FCPA Violation

    A report of bribery has come in: a whistleblower has made a complaint or an employee has discovered a violation of an internal control, such as fraud on an expense report.  Among the questions that must be answered are: Who should conduct which parts of the investigation? When should the investigation end?  How should the issue be remediated?  FCPA experts from Paul Hastings, Akin Gump and KPMG weigh in.  See also “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); “Developing and Implementing the Investigation Plan (Part Two of Two),” Vol. 3, No. 1 (Jan. 8, 2014).

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  • From Vol. 1 No.11 (Nov. 7, 2012)

    Specific Strategies from Pfizer, Barrick Gold and Other Leading Companies for Handling Actual and Potential FCPA Whistleblowers

    The SEC’s new whistleblower bounty program, promulgated under the Dodd-Frank Act, has altered litigation strategy and forced in-house counsel and compliance officers to revisit portions of their compliance policies to encourage would-be whistleblowers to report internally in lieu of, or before, going to the government.  On October 19, 2012, at the ABA’s Fifth Annual FCPA Institute in Washington, D.C., a group of in-house and outside counsel discussed how the whistleblower program has affected FCPA compliance policies, the challenges of handling and disciplining whistleblowers as well as recent caselaw interpreting the provisions.  For more on discipline considerations for anti-bribery professionals, see “When, Why and How Should Companies Discipline Employees for FCPA Violations?,” The FCPA Report, Vol. 1, No. 8 (Sep. 19, 2012).

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  • From Vol. 1 No.8 (Sep. 19, 2012)

    When, Why and How Should Companies Discipline Employees for FCPA Violations?

    When a company discovers an FCPA violation, and is faced with formulating a strategy to remediate the problem, one of the important and delicate considerations it must make is how to discipline the employees involved.  There are competing interests at work – the company needs to show the DOJ and the SEC that it reacted promptly and decisively, but it also must induce cooperation from key individuals in order to get to the root of the problem.  Termination may be appropriate for some employees, but companies must do so properly so as not to trigger retaliation; and other forms of discipline may be appropriate for employees with a less central role in the prohibited activities.  Determining the best proactive procedures to prevent misconduct, as well as the best reactive procedures once there has been a violation, and remedial measures to prevent reoccurrence, are paramount to minimize liability.  The government, once it is involved, may also pressure the company to take disciplinary action.  A further challenge hinges on the fact that information being provided in cooperating with the company, since it is not privileged, may be provided to the government for use in a possible criminal investigation.  This article provides context and practical guidance to companies navigating the disciplinary process.  In particular, this article discusses the application of the FCPA to employee conduct and how the government has treated employee discipline in the FCPA context.  Based on insight from experienced FCPA practitioners, this article addresses how to balance discipline with cooperation from employees during an internal investigation; strategies for inducing cooperation during the investigation; the privilege implications of cooperation; and considerations a company should weigh in considering disciplinary action, including government pressure and scrutiny of decisions, seniority of management, as well as disciplinary challenges in different jurisdictions.

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