The FCPA: It’s not all about bribery

The recent article, “When FCPA Charges Break the Mold,” published in Corporate Counsel (online subscription required) made the point that not all violations of the Foreign Corrupt Practices Act of 1977 (FCPA) involve bribery. The article notes companies may be held liable under the FCPA’s accounting provisions if the government doesn’t believe they have adequately detailed records or the proper internal controls to identify misleading or inaccurate financial reporting.

For instance, the article pointed out that retailer Stein Mart was charged under the FCPA earlier this year when the Securities and Exchange Commission (SEC) found the company had incorrectly recorded its pretax income and lacked the proper internal controls to catch the issue, which resulted in inaccurate financial reporting. There were no allegations of bribery associated with the SEC’s charges.

The takeaway is that companies subject to the FCPA need to be aware it’s not all about anti-bribery. They need to have a good handle on not just their anti-bribery controls, but also on the adequacy of their internal controls and financial reporting.

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Shauna has more than 20 years of experience providing dispute analysis, forensic investigations and valuation services to the business and legal communities. Her dispute analysis experience includes litigation consulting, trial, deposition and arbitration testimony and prelitigation financial analysis.

Shauna Woody-Coussens – who has written posts on BKD Forensics.


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