The D&O Diary

The D&O Diary

A PERIODIC JOURNAL CONTAINING ITEMS OF INTEREST FROM THE WORLD OF DIRECTORS & OFFICERS LIABILITY, WITH OCCASIONAL COMMENTARY

Category Archives: Foreign Corrupt Practices Act

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Foreign-Domiciled Individuals and the FCPA’s Reach

Posted in Foreign Corrupt Practices Act
Among the more controversial questions about the U.S.’s Foreign Corrupt Practices Act has been the extent of its reach in enforcement actions against foreign-domiciled individuals. Two recent decisions from the Southern District of New York reached differing conclusions about the statute’s reach. One case rejected the individual’s motion to dismiss the FCPA enforcement action, while … Continue Reading

Guest Post: Testing How Clean Your Books Really Are — The Case for Active Monitoring

Posted in Foreign Corrupt Practices Act
One of the more challenging exposures that many companies face is the possibility of an FCPA enforcement action. Because of the risk of fines, potential prosecution and reputational damages, many companies understand the need to implement compliance programs to try to avoid these problems. In a guest post, Al Vondra (pictured), a partner in the … Continue Reading

Faltering Lawsuits: Dismissal Motions Hit FCPA Follow-On Civil Actions and Say-on-Pay Suits

Posted in Foreign Corrupt Practices Act
Among the many litigation threats companies face, a couple of specific kinds of cases have recently emerged: the civil action following on in the wake of an FCPA investigation or enforcement action, and the shareholder suit following after a negative “say on pay” vote. Many companies involved in an FCPA investigation or experiencing a negative … Continue Reading

Big Pharma Bribery Probe Gains Momentum, Spurs Civil Litigation

Posted in Foreign Corrupt Practices Act
Since late last year, reports have been circulating that the U.S. government is investigating whether drug companies paid bribes overseas to increase sales and to obtain regulatory approvals. Some firms have now announced that they have reached settlements with enforcement authorities. And now the first civil lawsuit relating to these investigations has been filed, as … Continue Reading

U.K Government Issues Bribery Act Guidance, Sets Effective Date

Posted in Foreign Corrupt Practices Act
On March 30, 2011, the U.K. Ministry of Justice released its long-awaited Guidance with respect to The Bribery Act of 2010, detailing the Act’s scope and jurisdictional applicability. The Guidance, which can be found here,  has quickly been criticized in some quarters for “watering down” the Act, particularly with respect to the jurisdictional scope of … Continue Reading

Corruption Enforcement Actions Surge, Follow-On Lawsuits Emerge

Posted in Foreign Corrupt Practices Act
Every day seems to bring news of a new or expanded bribery or corruption allegations and enforcement actions. In recent days alone, Avon announced that it was suspending four executives in connection with an internal investigation into alleged bribery in the company’s Chinese operations, and U.S. authorities announced they were joining German and Russian authorities … Continue Reading

Wave of Indictments from Largest Ever FCPA Investigation: More Action Ahead?

Posted in Foreign Corrupt Practices Act
Longtime readers know  I have frequently argued that claims related to the enforcement of the Foreign Corrupt Practices Act are a growing source of liability exposure for companies and their senior officials, a stand that has made me the subject of occasional derisive comments. One reader recently suggested to me that I am "obsessive" about … Continue Reading

New Siemens Securities Suit: Did the Company Misprepresent Its Ability to Hit Targets Without Bribery?

Posted in Foreign Corrupt Practices Act, Securities Litigation
More than three years have passed since the first blockbuster revelations about corrupt payments at Siemens, yet litigation arising from the scandal continues to emerge. On December 4, 2009, plaintiffs’ lawyers filed a securities class action lawsuit in the Eastern District of New York against Siemens, based on alleged misrepresentations following initial revelations of the … Continue Reading

New Exposure for Corporate Officials: Control Person Liability for FCPA Violations

Posted in Foreign Corrupt Practices Act
A recent SEC enforcement action alleging Foreign Corrupt Practices Act violations against Nature’s Sunshine Products and two of its officers may represent a new and disturbing liability threat to corporate officials. The SEC asserted claims directly against the two individuals even though they were not alleged to have either involvement in or knowledge of the … Continue Reading

The D&O Link to FCPA Activity: The Follow-On Civil Lawsuit

Posted in Foreign Corrupt Practices Act
For some time, I have been asserting (refer here, for example) that increasing levels of Foreign Corrupt Practices Act enforcement activity represents an important development in the world of D&O insurance. During a conversation at the American Bar Association Annual Meeting in Chicago this past week, a senior claims executive from one of the leading … Continue Reading

A Comprehensive Look at FCPA Settlements

Posted in Foreign Corrupt Practices Act, Securities Litigation
A recurring theme on this blog has been the growing threat of civil litigation following in the wake of increased Foreign Corrupt Practices Act enforcement activity. (Refer for example, here.) A recent study both establishes both the overall scale of FCPA enforcement activity and quantifies the magnitude of the FCPA follow-on securities litigation.   The … Continue Reading

FCPA Year-End Update

Posted in Foreign Corrupt Practices Act
I encourage those that questioned my inclusion of FCPA issues in my list of top ten 2008 development to refer to the January 5, 2009 memo from the Gibson Dunn law firm entitled "2008 Year-End FCPA Update" (here).   As the memo puts it, 2008 was ‘by any measure …a monster year in Foreign Corrupt … Continue Reading

Headline News: Deception, Corruption and Litigation

Posted in Foreign Corrupt Practices Act, Madoff Litigation, Securities Litigation
From this week’s news, it almost appears as if there had been some kind of an unannounced competition for most outrageously fraudulent or corrupt scheme. First, there was Marc Dreier’s incredibly brazen plot to peddle bogus notes to hedge funds using assumed identities. Then there was Illinois Governor Rod Blagojevich’s apparent attempt to flog Barrack … Continue Reading

Ninth Circuit Rejects Securities Case Based on FCPA Disclosures

Posted in Foreign Corrupt Practices Act, Securities Litigation
In a November 26, 2008 opinion (here), the Ninth Circuit affirmed the lower court’s dismissal of a lawsuit asserting securities law violations against InVision and certain of its directors and officers based on FCPA-related disclosures. The case is noteworthy not only for its involvement of FCPA-related allegations, but also for the appellate court’s consideration of … Continue Reading

Web Notes and Updates

Posted in Foreign Corrupt Practices Act
FDIC Report: More Bank Failures Coming?: The FDIC’s Quarterly Banking Profile for the third quarter 2008 (here), released on November 25, 2008, paints a dismal picture of the banking industry.   Among other things, the Report notes that during the third quarter the number of insured institutions on the FDIC’s "Problem List" increased from 117 … Continue Reading

Significant Anticorruption Enforcement Developments Highlight Threats

Posted in Foreign Corrupt Practices Act
Two developments involving major European companies illustrate both the challenges and uncertain progress of global efforts to combat corruption.   First, on July 29, 2008, Siemens announced (here) that its Supervisory Board has resolved to claim damages from ten former members of the company’s Managing Board executive committee, including two former CEOs and a former CFO. … Continue Reading