DOJ and SEC Cracking Down on FCPA Violators

SEC is Onto Companies Using Bribes to Win Business Contracts

The SEC is Onto Companies That Use Bribes to Win Business Contracts

In February 2016, the Securities and Exchange Commission (SEC) announced that a $795 million settlement had been reached with a Dutch telecommunications provider for allegedly violating the U.S. Foreign Corrupt Practices Act (FCPA). The defendant company was accused of bribing government officials in an effort to win contracts in Uzbekistan. The SEC and the Department of Justice (DOJ) have together filed more FCPA complaints in the first six months of 2016 than they did in all of 2015. Clearly, FCPA regulators are ramping up enforcement of FCPA activity globally, and the who’s who of defendants covers just about every industry in America.

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SEC Assesses Millions in FCPA Fines

Lax record keeping results in SEC fines

Lax record keeping results in SEC fines

In the last fiscal quarter, the Securities and Exchange Commission ramped up its prosecution of Foreign Corrupt Practices Act (FCPA) cases imposing fines totaling $37 million against U.S. companies engaging in business overseas. It is part of an aggressive stance by the SEC to counter what it sees as laxity in record keeping and financial controls over payments made by U.S. entities to overseas agents. While bona fide agent fees may pose no problem, failure to abide by strict FCPA rules can lead to charges of conducting corrupt practices on foreign soil.

Resort Operator to Pay $9 Million Fine

In April, the SEC announced that the Las Vegas Sands Corporation agreed to pay a $9 million penalty in settlement of charges that it failed to properly document payment of millions of dollars to an overseas consultant hired to facilitate business dealings in China and the port of Macao. The defendant corporation owns or operates five luxury resorts in that locale, and the SEC alleged that the $62 million in consultant’s payments were not accurately noted in corporate records or were lacking in proper supporting documentation.

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