Coauthors: Valerie Charles, Partner, StoneTurn, and Jamen Tyler, Managing Director
Acquirers Can be Liable for the Target’s Misdeeds
Overview of the FCPA
The FCPA’s anti-bribery provisions make it unlawful for any U.S. corporation (or for any corporation that has issued securities trading on a U.S. exchange) to make (or promise to make) payments to foreign government officials for the purposes of influencing or inducing the foreign official to act in a particular manner or to secure an improper business advantage. This applies to any officer, director, employee, agent or shareholder acting on behalf of the corporation. Importantly, there is no de minimis exception to the anti-bribery provisions. No matter how small the violation, it can elicit enforcement.
The FCPA’s accounting provisions require that an issuer of securities trading on a U.S. exchange maintain books, records and accounts that accurately and fairly reflect the company’s transactions and that the issuer devise a system of internal accounting controls sufficient to provide reasonable assurances that the issuer’s financial statements are accurate. There is criminal liability for persons who knowingly circumvent or fail to implement a system of internal controls or who knowingly falsify an issuer’s books, records or accounts. Importantly, there is no “materiality” component to a books and records violation.
Reprinted with permission from the July 6, 2021, issue of Corporate Compliance Insights. © 2021 Corporate Compliance Insights. All Rights Reserved.Click here to view the full article