FCPAméricas Blog
Eli Lilly’s Distributor in Brazil: The Non-Obvious FCPA Risk
12.31.2012
A common misconception about the FCPA is that distributors do not create corruption risk for companies. After all, distributors take title to goods. What they do with those goods is their business, not the producer’s. Eli Lilly’s recent $29.4 million FCPA settlement with the SEC dispels this myth.
Actually, enforcement officials have been sending the message about distributor risk throughout 2012. In February, the DOJ and SEC settled with UK-based Smith & Nephew for $22.2 million for improper payments made by its Greek distributor to public doctors. The FCPA Guidance provides a hypothetical on page 64 showing how distributors can create third party risk, just like sales agents, local consultants, and customs brokers.
For those of us who work with Brazil, we have grown accustomed to distributor risks. Certain public procurements necessitate that the provider be Brazilian, requiring non-Brazilian ma... Read more
Wal-Mart, Go Big on FCPA Compliance
12.28.2012
I recently met a compliance officer for a particular multinational corporation that is currently under investigation for possible FCPA violations. FCPAméricas has been quite critical of this company. I told him that I hoped his colleagues were not offended. He said, no, not at all. His company sees the FCPA investigation as an opportunity.
I thought of this conversation when reading the New York Times article last week entitled, “How Wal-Mart Used Payoffs to Get Its Way in Mexico.” Wal-Mart’s reported activity, if true, was egregious. In May, FCPAméricas discussed this investigation as an “action that hits home.” The latest Times article gives additional details showing why this is. Circumventing zoning laws designed to protect cultural landmarks, subverting democratic governance to gain favor, bypassing regulations designed to protect Mexican citizens from unsafe construction and protect the environment from harm. These are just a few effects of corruption in places like Mexico.
Reports indicate that, in the face of an FCPA investigation, Wal... Read more
Who Is An FCPA Whistleblower?
12.20.2012
What type of person is an FCPA whistleblower? Is it someone just out to get rich? Is it a person constantly scheming to uncover wrongdoing where they work, to catch their employer in a bad act? Is it always a disgruntled worker who feels betrayed? Now that the Dodd-Frank whistleblower provisions have been in place for almost a year and a half, the answers to these questions are becoming clearer.
Background. The 2012 Annual Report to Congress by the SEC’s Office of The Whistleblower reports that the office received 3,001 tips, complaints, and referrals in its first full year, 115 of which were related specifically to alleged FCPA violations. The office received several of these from abroad. From Latin America, it received six tips from Venezuela, four from Mexico, three from Brazil, one from Bolivia, and one from the Dominican Republic. It is not clear whether the tips from Latin America related to FCPA or other securities issues.
The SEC’s whistleblower program allows an informant to receive 10 percent to 30 percent of the government’s financial recovery as long as the informant provides original information tha... Read more
