For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
For the best experience we recommend upgrading to the latest version of these supported browsers:
I wish to continue viewing on my unsupported browser
Regulatory enforcement is on the rise, and the DOJ and SEC are expected to remain aggressive in enforcing the FCPA in the future. But one fundamental economic issue in FCPA disputes has so far garnered little attention: if a company pays a bribe to secure a project, what exactly is the gain to the company from the bribe?
During the penalty phase of an enforcement action, the amount of fines (including disgorgement) levied are based on the "benefit received" from a bribe. However, to date there has been little consideration of the true benefit of the bribe. With fines escalating into the hundreds of millions of dollars, it is necessary to clearly understand what effect a bribe had on profits and to carefully establish what the but-for profits would have been without the bribe. Rigorous economic analysis sheds light on how to evaluate the effect of a bribe and what the appropriate fines, if any, should be.
The true benefit of a bribe is not based only on the profits earned from the project; there are a number of additional considerations based on the incremental probability of winning generated by the bribe, and the opportunity cost of the project won, that will lead to a more realistic (and sometimes lower) calculation of the true economic profits from the bribe. For example, while a bribe may have led to very high gains, the but-for profits could have been high (and the gain from the bribe low) if the bribe would have little effect on the probability of winning the work or if alternative projects were similarly profitable.
NERA experts can help in FCPA matters by using economic analysis to apply great precision to the financial benefits of bribery in order to evaluate the effect of the bribe, and therefore the appropriate fines. We offer a global team of experts in economics, finance, and accounting; many of NERA's economists are also Certified Public Accountants and Chartered Financial Analysts, with training and experience in analyzing financial statements and financial data prepared in accordance with Generally Accepted Accounting Principles and International Financial Reporting Standards.
Name | Title | Location | Phone | |
---|---|---|---|---|
Dr. Patrick Conroy | Senior Managing Director | Miami | +1 305 341 5025 | patrick.conroy@nera.com |
Dr. Graeme Hunter | Senior Managing Director | New York City | +1 212 345 7724 | graeme.hunter@nera.com |
Dr. Vinita Juneja |
Senior Managing Director
Chair of NERA's White Collar, Investigations and Enforcement Practice |
New York City
London Toronto |
+1 212 345 3148
+44 20 7659 8618 +1 416 868 7314 |
vinita.juneja@nera.com |
Ivelina Velikova | Director | New York City | +1 212 345 1160 | ivelina.velikova@nera.com |
Title | Date | |||
---|---|---|---|---|
SEC Roundup: Shadow Insider Training | 22 October 2021 | |||
NERA Insights Webinar | Meme Stocks and the Gamification of Retail Investing | 20 May 2021 | |||
Trade Secret Valuation in Criminal Sentencing | 21 April 2021 | |||
Two Sides of the Coin: Future Cryptocurrency Regulatory and Litigation Risks | 17 March 2021 | |||
ABA Section of Litigation Annual Conference | 03 May 2017 | |||
5th Annual Securities Litigation & Enforcement Institute | 01 March 2017 | |||
Third Annual White Collar Crime Institute | 19 May 2014 | |||
The Cost of Corruption on Global Business | 06 February 2014 | |||
Securities Enforcement Forum 2013 | 09 October 2013 | |||
NERA Inaugural Law and Economics Thought Leader Roundtable | 09 July 2013 | |||