It's Important for Business Professionals to Understand The FCPA
In a nutshell, the FCPA criminalizes the bribery of foreign government officials anywhere in the world if the purpose of the bribe is to influence an official decision in order to obtain a business benefit. Additionally the FCPA requires companies whose stock is traded on a U.S. exchange to meet certain standards regarding their accounting practices, books and records, and internal controls.
How a Company Can Get in Trouble
Let's assume that you are employed by Everything Widget ("EW"), a publicly traded, widget making concern based Wonderland, USA. EW decides that the market for widgets is growing at tremendous pace in the newly created Republic of Corruptland and they need to open a direct sales office in that country. A subsidiary is properly created under the watchful eye of a Corruptland lawyer and consistent with that country's laws, a Corruptland national is hired as manager. Unfortunately EW's upper management is completely unaware of the existence and application of the FCPA and as result develops no policies designed to ensure that no bribes are paid to government officials.
Trouble, Part II
EW's management is not concerned with any possible bribery because even if such conduct were to take place, it would all happen in Corruptland. No such conduct would ever take place is the United States. EW is under significant pressure to meet both internal and analyst driven sales expectations and unfortunately in Corruptland it is almost impossible to get anything done without bribing key government officials. EW's subsidiary starts making payments to government officials and as expected, sales increase dramatically.
It's Important for Outside Counsel to Be Familiar with The FCPA
Throughout this process EW's management has consulted with its outside law firm; their lawyers have handled their public filings, negotiated the purchase of the foreign subsidiary but because criminal law is not their area of practice, they have neglected to advise EW of the importance of careful monitoring the foreign subsidiary to ensure that no payments to foreign government officials are being made.
When U.S. Management Discovers The Payments
EW, having now discovered that bribes are taking place, is obligated to disclose this conduct to the Securities and Exchange Commission and the Department of Justice and face significant penalties, which include criminal penalties carrying sanctions for individual employees of up to 5 years of imprisonment and fines of up to $100,000 or twice the amount of the gross pecuniary gain resulting from the improper payment. EW, likewise faces significant criminal penalties which includes fines up to $2,000,000 or alternatively, twice their pecuniary gain.
Recordkeeping and The FCPA
The FCPA can also be violated by improperly recording payments to third parties even if those payments are not bribes. In other words, intentional, inaccurate recording of any payment is a violation. Failure to describe what actually occurred could be a violation. For example the payment of a lawful commission, intentionally recorded for some reason as a service a contract, may be a violation of the FCPA. In such circumstances a prosecutor does not have to prove that payment was a bribe in order to prove a violation of the statute.
Our Rating is calculated using information the lawyer has included on their profile in addition to the information we collect from state bar associations and other organizations that license legal professionals. Attorneys who claim their profiles and provide Avvo with more information tend to have a higher rating than those who do not.
What determines Avvo Rating?Experience & background
Years licensed, work experience, education
Legal community recognition
Peer endorsements, associations, awards
Legal thought leadership
Publications, speaking engagements
This lawyer was disciplined by a state licensing authority in .
Disciplinary information may not be comprehensive, or updated. We recommend that you always check a lawyer's disciplinary status with their respective state bar association before hiring them.