Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Business Crimes BulletinFeaturesForeign Corrupt Practices ActLitigationWhite Collar Crime

Second Circuit Ruling Offers Ways to Mitigate FCPA Risk Through Corporate Structure

By Andrey Spektor
September 01, 2022

The Foreign Corrupt Practices Act (FCPA) is an unusual beast. It is used by the Department of Justice (DOJ) and the U.S. Securities and Exchange Commission to extract eye-watering sanctions from companies after years of investigation — millions on the lower end and billions on the higher. The DOJ employs the FCPA to indict defendants who live outside the United States, engage in purported misconduct outside the United States, and cause the alleged harm outside the United States. And when those defendants are employed or affiliated with U.S. companies, then those companies can be on the hook too.

Yet despite the statute's breadth and its aggressive enforcement, it has largely escaped judicial scrutiny. Individuals and companies are reluctant to test the bounds of the law and risk federal prison or crippling penalties. They cut the best deals they can get and move on. But one man, Lawrence Hoskins, has refused to fall in line and has almost single-handedly shaped recent FCPA jurisprudence, which could be a boon to corporate counsel and compliance officers.

|

The Hoskins Story

Hoskins' story is quintessentially FCPA: The conduct occurred almost entirely abroad, many years ago. From 2002 to 2009, he worked for a corporation headquartered in Europe, and though he was technically employed by its UK subsidiary, he was assigned to work in France. Hoskins was not a U.S. citizen and did not participate in the bribery scheme while on U.S. soil. Hoskins' only connection to the United States was that the department in which he worked performed functions for the corporation's various subsidiaries, including for one based in Connecticut. That subsidiary used consultants to bribe foreign officials to secure a contract. The company resolved the case with the DOJ in late 2014, for a then-record setting $772 million in penalties (barely cracking the top 10 today). Hoskins fought the case, and ultimately prevailed on the FCPA charges.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
How Secure Is the AI System Your Law Firm Is Using? Image

In a profession where confidentiality is paramount, failing to address AI security concerns could have disastrous consequences. It is vital that law firms and those in related industries ask the right questions about AI security to protect their clients and their reputation.

COVID-19 and Lease Negotiations: Early Termination Provisions Image

During the COVID-19 pandemic, some tenants were able to negotiate termination agreements with their landlords. But even though a landlord may agree to terminate a lease to regain control of a defaulting tenant's space without costly and lengthy litigation, typically a defaulting tenant that otherwise has no contractual right to terminate its lease will be in a much weaker bargaining position with respect to the conditions for termination.

Pleading Importation: ITC Decisions Highlight Need for Adequate Evidentiary Support Image

The International Trade Commission is empowered to block the importation into the United States of products that infringe U.S. intellectual property rights, In the past, the ITC generally instituted investigations without questioning the importation allegations in the complaint, however in several recent cases, the ITC declined to institute an investigation as to certain proposed respondents due to inadequate pleading of importation.

The Power of Your Inner Circle: Turning Friends and Social Contacts Into Business Allies Image

Practical strategies to explore doing business with friends and social contacts in a way that respects relationships and maximizes opportunities.

Authentic Communications Today Increase Success for Value-Driven Clients Image

As the relationship between in-house and outside counsel continues to evolve, lawyers must continue to foster a client-first mindset, offer business-focused solutions, and embrace technology that helps deliver work faster and more efficiently.