The Foreign Corrupt Practices Act (FCPA) is enforced to deter and punish these forms of corruption in our political system and our financial markets. Often whistleblowers are the only individuals with the kind of knowledge to stop foreign bribery and accounting fraud.
For this reason, the SEC whistleblower program creates an incentive of rewarding between 10 and 30 percent of the recovered amount in FCPA cases to the whistleblower bringing quality, original information regarding Foreign Corrupt Practice Act violations. FCPA whistleblowers are encouraged to report from any country in the world. With experienced counsel to assist, a whistleblower may bring such a claim anonymously.
The FCPA was first enacted in 1977 in the wake of several bribery investigations against U.S. companies for bribery of foreign officials, and includes prohibitions covering both foreign bribery and fraudulent accounting. Both the Securities and Exchange Commission and the Department of Justice share enforcement of the FCPA. Its enforcement is a national priority, and whistleblowers play a critical role in utilizing the act to help stop fraud.
The anti-bribery provisions of the Foreign Corrupt Practice Act prohibit U.S. persons and businesses – as well as companies listed on U.S. exchanges or required to file with the SEC, as well as certain others while in the U.S. – from making corrupt payments to foreign officials in order to obtain or retain business. Such payments can be subject to both civil and criminal liability.
The accounting requirements demand that companies listed on U.S. exchanges or required to file with the SEC, keep and maintain accurate books and records as well as maintain a meaningful and adequate system of internal accounting controls. Falsification of books and records or failing to implement these controls violates the Foreign Corrupt Practice Act.
Some of the largest monetary sanctions against U.S. companies have resulted from FCPA investigations, often triggered by whistleblowers. Among the many companies that have paid tens and even hundreds of millions of dollars for violation of this statute include Siemens ($800 million), KBR/Halliburton, BAE, Total S.A. and Daimler AG. Many of these companies are headquartered outside the United States but are nonetheless liable under the Foreign Corrupt Practice Act.
Common Foreign Corrupt Practice Act fraud can include:
- Falsifying documents and transactions to conceal that payment went to a foreign official or political party.
- Misclassifying a bribe as a commission or classifying as a marketing/selling or cost of goods expense.
- Accounting schemes, in which actual figures are inflated on the company’s books and records to account for an improper payment.
Read more about the FCPA in this comprehensive Resource Guide.
Hagens Berman represents several whistleblower actions under the CFTC and SEC Whistleblower Programs, including representation of high-profile market expert Haim Bodek, and marshals its significant nationwide resources and expertise in financial fraud to best present whistleblower matters to the SEC and CFTC.