James Tillen Quoted Regarding FCPA Settlement Trends in Corporate Counsel
"For Avon, $135M FCPA Settlement Is Just a Start"Corporate Counsel
James Tillen was quoted regarding Avon Products Inc. and its long-running Foreign Corrupt Practice Act (FCPA) case and proposed settlement -- a recent trend in overseas bribery cases. "Avon fits in with trends we're seeing, in that how the case is being resolved is consistent with past cases," Tillen said, explaining that the trend included that both the Department of Justice and the Securities Exchange Commission were involved in the settlement talks, a subsidiary would plead guilty, the fines and penalties amount to more than $100 million, and a monitor would watch over the company for at least 18 months. "That's all typical of matters where the fines are higher." The investigation has been not only long, but also costly, with nearly $400 million incurred by Avon, not including the settlement itself.
"The amount of time it took to investigate and resolve the case suggests that there was a lot there. Maybe multiple people were involved, and maybe multiple countries," Tillen said, adding that another part of the trend in FCPA cases is adding new management. Avon replaced its chief executive and general counsel in 2012. "Many companies going through something like this will look to bring in-house someone with experience in designing and implementing a compliance program. They can show it as a part of remediation efforts that here is someone who doesn't have any connection with past bad activity." Tillen said that Avon has drawn a lot of attention this year because of the high cost of its investigation. "And that's something that unfortunately is happening more and more. It's a troubling trend for companies that suggests that these investigations should be carefully scoped and resourced so these costs don't get out of hand," he said. "The more players and the more countries involved, the more costs."