Page 123 - U.S. FOREIGN CORRUPT PRACTICES ACT

A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.

235 ee, e.g., Complaint, SEC v. Biomet, supra note 229 251 Id.
(bribes paid to government healthcare providers in which
phony invoices were used to justify payments and bribes 252 Foreign Corrupt Practices Act of 1977, Pub. L.
were falsely recorded as “consulting fees” or “commissions” No. 95-213, § 102, 91 Stat. 1494 (1977).
in company’s books and records); Criminal Information,
United States v. Biomet, supra note 229 (same); SEC v. Alcatel- 253 See supra note 47; In the Matter of TechnipFMC plc,
Lucent, supra note 47 (bribes paid to foreign officials to supra note 193, (French company); United States v. Technip,
secure telecommunications contracts where company lacked supra note 193, (same); see also Admin. Proc. Order, In the
proper internal controls and permitted books and records to Matter of Diageo plc, Exchange Act Release No. 64978 (SEC
falsified); United States v. Alcatel-Lucent France, supra note 129 July 27, 2011) (UK company), available at https://www.sec.
(same). gov/litigation/admin/2011/34-64978.pdf; Admin. Proc. Order,
In the Matter of Statoil, ASA, Exchange Act Release No. 54599
236 Complaint, SEC v. Daimler AG, supra note 47; Criminal (SEC May 29, 2009) (Norwegian company), available at https://
Information, United States v. Daimler AG, supra note 47. www.sec.gov/litigation/admin/2006/34-54599.pdf; Criminal
Information, United States v. Statoil, ASA, No. 06-cr-960 (S.D.N.Y.
237 Id. Oct. 13, 2006) (same), available at https://www.justice.gov/
sites/default/files/criminal-fraud/legacy/2011/02/16/10-13-
238 Id. 09statoil-information.pdf.

239 Id. 254 Although private companies are not covered by the
books and records and internal controls provisions of the
240 Id. FCPA and do not fall within SEC’s jurisdiction, such companies
generally are required by federal and state tax laws and state
241 Id. corporation laws to maintain accurate books and records
sufficient to properly calculate taxes owed. Further, most
242 See supra note 10. large private companies maintain their books and records
to facilitate the preparation of financial statements in
243 See, e.g., Complaint, SEC v. Siemens AG, supra note 47; conformity with GAAP to comply with financial institutions’
Complaint, SEC v. York Int’l Corp., supra note 116; Complaint, lending requirements.
SEC v. Textron, supra note 116; Criminal Information, United
States v. Control Components, Inc., No. 09-cr-162 (C.D. Cal. 255 See SEC v. RAE Sys. Inc., supra note 92; In re RAE Sys.
July 22, 2009), ECF No. 1 [hereinafter United States v. Control Inc., supra note 92.
Components], available at https://www.justice.gov/sites/
default/files/criminal-fraud/legacy/2011/02/16/07-22-09cci- 256 See Section 13(b)(6) of the Exchange Act, 15 U.S.C.
info.pdf; Criminal Information, United States v. SSI Int’l Far East, § 78m(b)(6), which provides that where an issuer “holds 50
Ltd., No. 06-cr-398, ECF No. 1 [hereinafter United States v. SSI per centum or less of the voting power with respect to a
Int’l] (D. Or. Oct. 10, 2006), available at https://www.justice. domestic or foreign firm,” the issuer must “proceed in good
gov/sites/default/files/criminal-fraud/legacy/2011/02/16/10- faith to use its influence, to the extent reasonable under the
10-06ssi-information.pdf. issuer’s circumstances, to cause such domestic or foreign
firm to devise and maintain a system of internal accounting
244 See, e.g., Complaint, SEC v. El Paso Corp., supra note controls consistent with [Section 13(b)(2)].”
188; Complaint, SEC v. Innospec, supra note 80; Complaint,
SEC v. Chevron Corp., 07- cv-10299 (S.D.N.Y. Nov. 14, 2007), 257 See 15 U.S.C. § 78m(b)(6). Congress added the
ECF No. 1, available at https://www.sec.gov/litigation/ language in sub-section 78m(b)(6) to the FCPA in 1988,
complaints/2007/comp20363.pdf. recognizing that “it is unrealistic to expect a minority owner
to exert a disproportionate degree of influence over the
245 See supra note 9. accounting practices of a subsidiary.” H.R. Rep. No. 100-576,
at 917. The Conference Report noted that, with respect to
246 See Complaint, SEC v. Maxwell Technologies, supra minority owners, “the amount of influence which an issuer
note 229. may exercise necessarily varies from case to case. While
the relative degree of ownership is obviously one factor,
247 See Complaint, SEC v. Willbros Group, supra note 10. other factors may also be important in determining whether
an issuer has demonstrated good-faith efforts to use its
248 15 U.S.C. § 7201 et seq. influence.” Id.; see also S. Rep. No. 100-85, at 50.

249 Exchange Act Rule 13a-15, 17 C.F.R. § 240.13a-15; 258 Section 20(e) of the Exchange Act, titled “Prosecution
Exchange Act Rule 15d-15, 17 C.F.R. § 240.15d-15; Item 308 of Persons Who Aid and Abet Violations,” explicitly provides
of Regulation S-K, 17 C.F.R. § 229.308; Item 15, Form 20-F, that for purposes of a civil action seeking injunctive relief
available at https://www.sec.gov/about/forms/form20-f.pdf; or a civil penalty, “any person that knowingly or recklessly
General Instruction (B), Form 40-F (for foreign private issuers), provides substantial assistance to another person in violation
available at https://www.sec.gov/about/forms/form40-f.pdf. of a provision of this title, or of any rule or regulation issued
under this title, shall be deemed to be in violation of such
250 See U.S. Sec. and Exchange Comm’n, Commission provision to the same extent as the person to whom such
Guidance Regarding Management’s Report on Internal assistance is provided.” See Section 20(e) of the Exchange Act,
Control over Financial Reporting Under Section 13(a) or 15 U.S.C. § 78t(e).
15(d) of the Securities Exchange Act of 1934, Release No. 33-
8810 (June 27, 2007), available at https://www.sec.gov/rules/
interp/2007/33-8810.pdf.
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