FCPA Settlements: It's a Small World After All

Wed Jan 28 15:24:38 EST 2009
By Raymund Wong and Dr. Patrick Conroy

The Foreign Corrupt Practices Act (FCPA) prohibits the bribery of foreign officials in order to obtain or retain business. But its origins are rooted in the investigations of financial contributions related to the Watergate scandal. Recently, the FCPA has entered a new period of increased enforcement by both the Securities and Exchange Commission and the US Department of Justice. In the coming years, both domestic and foreign public companies may have to deal with increased scrutiny and potential criminal prosecutions and fines. Recognizing this stepped-up scrutiny, NERA has developed a proprietary database of settlements from 2002 through 2008. This paper, by Senior Consultant Raymund Wong and Senior Vice President Dr. Patrick Conroy, examines settlement patterns and the extent of indirect impact in the form of civil litigation. The authors note that the extent of the fallout from the relatively recent trend of increased FCPA enforcement actions remains uncertain. Given current trends toward globalization, coordinated regulatory scrutiny, and record-keeping requirements of publicly traded companies in the wake of recent market turmoil, enforcement of the FCPA may become a higher priority around the world. And as FCPA-related enforcement against domestic and foreign issuers increases, it is likely that related securities litigation will be an issue in many of these cases.

An excerpt from this paper was published in Kroll's Global Fraud Report, Issue 8, March 2009. View report here.