Friday, February 3, 2012

Foreign Corrupt Practices Act -- the next big fraud play


I predict the next big fraud play will be under the Foreign Corrupt Practices Act (FCPA).  The FCPA is codified as part of the SEC securities laws; therefore, it’s covered under the Dodd-Frank Act (DFA). 

A whistleblower with evidence of bribes abroad (e.g., in Mexico) by a U.S. firm can file an SEC whistleblower claim. 

If the complaint leads to a recovery, the whistleblower is entitled to a DFA bounty just like any other securities law whistleblower.  The whistleblower bounty is measured on fines and penalties imposed by the SEC, which can be quite large and include ill-gotten gains realized by the firm offering the bribes.

For FCPA matters, these sites look helpful:


1.  Dow Jones Anti-Corruption service


2.  The FCPA Database


3.  The FCPA Blog


4.  The FCPA Compliance and Ethics Blog


5.  Transparency International
  • click here for TI's Bribe Payer Index, which "ranks the likelihood of companies from 28 leading economies to win business abroad by paying bribes."  The U.S. is no longer on top. 

If blue-chip U.S. companies are bribing docs in the U.S., then it's a safe bet they are doing the same in Mexico, which through its state-run health care system, buys the majority of its products and devices from U.S. firms. 

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