"FCPA Enforcement Heats Up"Corporate Secretary
In this article, John Davis discusses the increase in FCPA actions by the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC), and some recent enforcement trends. While in the first three months of 2013 there was a slowdown in enforcement actions, April brought a new wave of activities.
"On the corporate side there was a bit of a lull, but that lull has passed," Davis said. "The amount of continued investigations makes it very clear that ongoing enforcement is happening. Don’t let the perceived lull or the lack of recent blockbuster finds convince you the agencies are backing off. Companies can’t afford to skimp in this area." According to Miller & Chevalier's FCPA Spring Review 2013, last year the government initiated at least 39 new corporate investigations, almost 20 percent more than the previous record of 33, initiated in 2007 – three years before a 2010 surge in dispositions that many believe marked a new era in FCPA scrutiny.
Companies should also be aware of investigations targeting their industry peers, Davis noted. Often, when investigators discover a practice by one industry player that potentially violates FCPA rules, they will expand their investigation to examine whether that company’s peers employ similar practices. "If you work for a company and you hear or read a story about someone else in your industry being investigated, there is a very real possibility the rest of your industry is going to come under investigation as well," Davis said. "And if you are the general counsel of that [company] you should probably get an understanding of what is going on in your company because the SEC and DOJ may come knocking pretty soon."