The Securities and Exchange Commission (SEC) continues to ramp up its enforcement of the Federal Corrupt Practices Act (FCPA). In 2010, the SEC’s Enforcement Division created a specialized unit dedicated to enforcement of the FCPA, which prohibits U.S. companies from bribing foreign officials for government contracts and other business. To date, the agency has brought and settled nine separate enforcement actions in 2015.
Bristol-Myers Squibb Co. (BMS) is the most recent company to resolve FCPA charges. The company will pay nearly $14.7 million to settle allegations that its joint venture in China bribed health care providers at state-controlled hospitals in an effort to boost drug sales.
“Certain sales representatives of the joint venture improperly generated funds that were used to provide corrupt inducements [to health care providers] in the form of cash payments, gifts, meals, travel, entertainment, and sponsorships for conferences and meetings in order to secure new sales and increase existing sales,” the SEC stated. “BMS falsely recorded the relevant transactions as legitimate business expenses in its books and records.”
Additional enforcement actions
More enforcement actions are expected in the coming months. In addition to resolved cases, at least 78 companies reported that they are subject to an ongoing FCPA investigation in SEC filing as of September 30, according to Corporate Counsel.
In several cases, the FCPA violations did not involve outright bribes, suggesting that the SEC is making good on its “broken windows” policy in the FCPA arena. As we have previously mentioned on this blog, under the leadership of SEC Chair Mary Jo White, the agency’s enforcement policy is to “pursue even the smallest infractions” as a means of deterring more serious violations.
In its case against Hyperdynamics Corporation, the SEC alleged that the energy company committed books and records and internal controls offenses. Notably, the Department of Justice concluded its FCPA investigation without bringing charges. According to the SEC, Hyperdynamics failed to accurately record certain payments made by its subsidiary based in the Republic of Guinea and also failed to determine whether the company’s subsidiary paid related parties. Last month, Hyperdynamics resolved the FCPA charges by agreeing to pay the SEC $75,000.
In light of the SEC’s increased attention on the FCPA, corporations should focus on strengthening their internal controls and compliance efforts. As the latest enforcement actions highlight, even small violations can lead to costly legal headaches.
Failing to Comply With NJ Rent Control Exemption May Prove Costly
What Developers Need to Know About New Jersey’s Rent Control Exemption Law to Ensure Entitlement to Exemption for Newly Constructed Multi-family Housing. A property owner in Jersey City is facing a $400 million federal class action lawsuit alleging that the landlord did not follow the procedural steps required to be eligible for exemption from local […]
Crypto Securities Law: When Tokens Become Investment Contracts
The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
The Due Diligence Process for NY Condominiums and Cooperatives
While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Smart Contract Legal Issues: Drafting Agreements for Blockchain
Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Are Stay Interviews the Key to Retaining Top Talent?
Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
