Foreign Corrupt Practices Act
"Management" Reports on Internal Control: A Legal Perspective
committee on Law and Accounting, 49(2): 889–946 (Feb. 1994)
Much attention has been devoted in the last several years to the subject of internal accounting controls, and "management" reports thereon, in Congress and elsewhere. The committee of Sponsoring Organizations of the Treadway Commission has published an extensive report on internal controls, and the Law and Accounting committee of the Section of Business Law has issued its own Report which explores the liability implications and recommendations concerning terminology, of such a "management" report.
Internal Investigations and the Defense of Corporations in the Sarbanes-Oxley Era
Robert S. Bennett, Alan Kriegel, Carl S. Rauh, and Charles F. Walker, 62(1): 55–88 (Nov. 2006)
Internal investigations long have been an integral part of the successful defense of corporations against charges of misconduct, as well as an important board and management tool for assessing questionable practices. With the heightened standards of conduct and increased exposure created by Sarbanes-Oxley, this essential instrument for safeguarding corporate interests has become even more crucial in identifying and managing risk in the enforcement arena. This article examines from a practitioner's standpoint when and how internal investigations should be conducted in order to protect the corporation in criminal, civil and administrative proceedings. Particular attention is paid to the issues created by a concurrent government investigation and in dealing with employees and former employees in the course of an investigation. The article also addresses the role of the Audit committee under Sarbanes-Oxley, and the important issue of reporting the findings of the investigation to appropriate corporate officials. The subject of self-reporting by the Company to enforcement authorities is considered as well. In this context, the article explores the SEC's position on crediting self-reporting and cooperation as set forth in the Seaboard report; Department of Justice policy as embodied in the Thompson Memorandum; and the impact of the Federal Sentencing Guidelines for Organizations.
Toward a Reg. FCPA: A Modest Proposal for Change in Administering the Foreign Corrupt Practices Act
James R. Doty, 62(4): 1233–1256 (August 2007)
Approaching the 30th anniversary of the FCPA, enforcement trends indicate a need for an administrative regime that would enable public companies to achieve a measure of regulatory certainty regarding compliance. Case-by-case enforcement is not a satisfactory substitute for a rule enabling boards and senior management to protect the corporation from vicarious liability for the actions of officers and employees. A new, rule-based system of permissive filing, modeled on the principles of other administrative safe-harbor regulations, would serve the national interest while advancing the goals of the FCPA.
Prescriptions for Compliance with the Foreign Corrupt Practices Act: Identifying Bribery Risks and Implementing Anti-Bribery Controls in Pharmaceutical and Life Sciences Companies
Roger M. Witten, Kimberly A. Parker, Jay Holtmeier, and Thomas J. Koffer, 64(3): 691-738 (May 2009)
The U.S. Foreign Corrupt Practices Act has become a focal point of enforcement efforts of the U.S. Department of Justice and U.S. Securities and Exchange Commission, as witnessed by the surge in the number of companies and individuals currently under investigation for, or that recently have settled charges of, bribing foreign government officials to secure business advantages. This heightened level of law enforcement activity has particularly affected pharmaceutical and life sciences companies. For example, enforcement authorities currently are conducting an investigation involving payments made by the six leading manufacturers of orthopedic implants to physicians employed by government-owned hospitals outside the United States, while several well-known pharmaceutical companies are also targets of similar investigations. This Article examines from a practitioner's perspective the specific types and levels of risks that pharmaceutical and life sciences companies confront under the Foreign Corrupt Practices Act that, in some instances, have led to enforcement proceedings. The Article then addresses the elements of an effective Foreign Corrupt Practices Act compliance program to control the bribery risks that arise from the complex and varied ways in which such companies interact with government regulators and customers. The Article provides practical advice on the compliance programs that should be considered by pharmaceutical and life sciences companies to control company- and country-specific bribery risks, particularly in light of the current enforcement environment. While these companies confront a number of unique risks, many of the insights and recommendations in the Article are relevant to companies in other industries that operate in a global environment.
Disclosure Obligations Under the Federal Securities Laws in Government Investigations
David M. Stuart and David A. Wilson, 64(4): 973-998 (August 2009)
With the prevalence of government investigations into corporate conduct, public companies frequently face decisions about whether, when, how, and where to disclose to investors the existence of such investigations and the facts learned in the course of, or as a result of, those investigations. While the federal securities laws (and the rules and regulations promulgated thereunder) require disclosure of specific events that may arise during an investigation, neither those laws nor the courts that have interpreted them provide clear guidance for many of the disclosure decisions that must be made over the course of an investigation. As a result, counsel must carefully analyze numerous facts and circumstances, understand the company's previous disclosures, make "materiality" assessments, and determine whether to make disclosure in a current report or wait until the next periodic filing. This Article seeks to present, through an analysis of precedent disclosures, caselaw, rules, and practical ramifications, the considerations counsel must take into account in evaluating disclosure decisions in the context of an investigation. These considerations can help counsel avoid having a disclosure decision worsen the already difficult circumstances posed by the investigation itself.
Closing Time: You Don’t Have to Go Home, But You Can’t Stay Here
Richard D. Bernstein, James C. Dugan, and Lindsay M. Addison, 67(4): 957 - 976 (August 2012)
In a significant trend, U.S. courts are increasingly rejecting cases involving foreign plaintiffs or foreign conduct. This trend was accelerated by the U.S. Supreme Court’s decision in Morrison v. National Australia Bank Ltd., which established that U.S. securities laws cannot be applied extraterritorially. Lower courts have extended the presumption against extraterritoriality to other federal and state statutes.
From Regulation to Prosecution to Cooperation: Trends in Corporate White Collar Crime Enforcement and the Evolving Role of the White Collar Criminal Defense Attorney
Robert S. Bennett, Hilary Holt LoCicero, and Brooks M. Hanner; 68(2): 411-438 (February 2013)
This article traces the steady growth of criminal law into fields that had previously been addressed by civil statutes, particularly in relation to the concept of corporate criminal liability. The article also describes the means through which the federal government has encouraged cooperation between corporations that are being investigated and their investigators. This fundamental shift in how corporate misconduct is treated by the federal government has reframed the role of a criminal defense attorney who defends corporations and executives. Any lawyer facing such a task must be willing to incorporate new strategies into daily practice while also evaluating the theoretical considerations governing what it means to “bet the company.”