NEW YORK (
In a recent survey, Foreign Corrupt Practices Act (FCPA) risk ranked among the top concerns of the nearly 500 directors and general counsels surveyed. The FCPA is the U.S. law that prohibits individuals and companies from offering or giving bribes to obtain or retain business.
Yet only a little more than a third of general counsels think their board and management have done a good job with FCPA training and compliance, and two-thirds believe there's room for improvement. This misalignment of FCPA risk and response is a matter of immense concern for businesses as 2011 is shaping up to be another banner year in terms of enforcement.
For starters, we've seen the first FCPA trial and conviction of a U.S. company, Lindsay Manufacturing, along with 33 enforcement actions. In the last three months alone, regulators have concluded three major settlements with Bridgestone, Diageo, and Armor Holdings, a combined total of more than $58 million. The government's focus on prosecuting individuals continues unabated.By all indications, the number of cases and severity of penalties -- including jail time for corporate executives from the C-suite on down -- will only rise. At the Department of Justice, a reported 150 investigations are underway even as the team of Justice Department prosecutors and FBI investigators dedicated to FCPA prosecution rapidly expands. At the Securities and Exchange Commission, the departure of the much-heralded FCPA unit chief Cheryl Scarboro, who oversaw the famous SEC investigation of Siemens AG, has not slowed the pace of FCPA-related activity. Most believe that her successor, Kara Novaco Brockmeyer, will waste little time picking up where Scarboro left off. Brockmeyer's background is indeed formidable. Prior to assuming her new role, she served as an assistant director in the enforcement division where she lead SEC investigations in a number of high- profile FCPA cases, including Halliburton, KBR, Technip, and ENI S.p.A. On the regulatory side, Dodd Frank has dramatically changed the landscape by providing a compelling monetary incentive -- 10 to 30 percent of any amounts recovered on settlements of more than $1 million -- for whistleblowers to report suspected violations directly to the SEC. By all accounts , the reports of alleged wrongdoing related to the FCPA are already rolling in.