FCPA: Enforcement Is Ramping Up

The Securities and Exchange Commission and the Department of Justice have recently strengthened their enforcement efforts under the Foreign Corrupt Practices Act (FCPA). Individual officers and directors are being held personally liable for violations of financial reporting regulations. Two-thirds of the top 20 largest criminal FCPA case resolutions have occurred in the last four years, and three of the top five largest penalties ever issued happened in 2013. And, while the SEC brought fewer FCPA cases in 2013 than in prior years, the trend has already reversed—as of mid-2014, SEC has filed as many enforcement actions as it did the entire year before. 

Having a strong and effective compliance program in place is essential with the increasingly vigorous enforcement of financial accounting and reporting regulations. This article describes recent trends in enforcement of the FCPA, as well as guidance from the SEC and DOJ on adequate internal controls that ensure compliance.