Executives Investigated Under FCPA Can Fear Less

CFO.com

01.09.2017

In this article, Daniel Patrick Wendt and Alice Hsieh discuss the Department of Justice's (DOJ's) shift away from executive terminations and separations as a penalty for Foreign Corrupt Practices Act (FCPA) violations towards discipline that is less severe. "Until fairly recently the DOJ has emphasized that companies are expected to discipline senior executives and not just rely on terminating lower-level employees," Wendt and Hsieh wrote, an expectation they relate to the "Filip Factors," a 2008 memorandum that established a general set of principles that DOJ uses to determine levels of prosecution based on a company's remedial actions. Because companies "entering into negotiations with the DOJ are expected to provide a 'Filip Factors presentation,' there is often pressure on the company during this process to improve its remediation summary by specifying that all relevant personnel – senior or junior – have been separated from the company," the authors wrote. Wendt and Hsieh review two 2016 DOJ resolutions with LATAM and Och-Ziff Capital Management and recent public statements from DOJ officials, which "indicate that companies likely now have more flexibility in determining remediation and discipline programs that will pass inspection at the DOJ," they said.