Liability of U.S. Companies for Alleged Bribery By Foreign Subsidiaries
July 28, 2005
The Foreign Corrupt Practices Act (FCPA) provides two avenues by which a U.S. concern can be prosecuted for improper payments to foreign officials: the anti-bribery provisions, and the books-and-records and internal-control provisions. Somewhat unclear, however, is the kind of involvement in a foreign subsidiary a U.S. parent must have such that it might be exposed to criminal or civil enforcement. This article explores liability for misconduct of foreign subsidiaries and what preventive measures a parent can take.
Drug and Medical Device Manufacturers
July 28, 2005
Following a guilty plea last year by a major pharmaceutical company, Associate Attorney General Robert McCallum declared that "[t]he Department of Justice is committed to rooting out and prosecuting health care fraud. It is of paramount importance that the Department use every legal tool at its disposal to assure the health and safety of the consumers of America's health care system." The tools -- the variety of different criminal statutes and theories used to prosecute drug and device manufacturers -- are so diverse as to defy easy summary.
The Unchanged Agenda
June 27, 2005
The call for improved corporate ethics has been thoroughly embraced by the worlds of business and public policy -- so much so that the recent invalidation of the federal sentencing guidelines, which allowed corporations to mitigate their sentences, will not slow the campaign's momentum. Rather, the guidelines' new advisory status should focus companies more on the overriding need to build an ethical culture, and less on rote, process-oriented compliance. This change in focus will underscore the guidelines' core strength: They are more than just legal procedure -- they articulate best practices in business ethics, which companies can put to constructive use.
Supreme Court Overturns Arthur Andersen Conviction
June 27, 2005
The ruling was swift and unanimous. On May 31, 2005, the Supreme Court reversed the conviction of the late accounting firm, Arthur Andersen LLP (Andersen), under the federal witness tampering statute, 18 U.S.C. ' 1512(b)(2), in a key case arising from one of the most significant corporate scandals in American history. <i>Arthur Andersen LLP v. United States</i>, 544 U.S. -- (2005) (full text of the opinion can be downloaded at www.supremecourtus. gov/opinions/04pdf/04-368.pdf). The result was unsurprising given the antagonistic questions the Justices posed to the government at oral argument. The Court overturned Andersen's conviction on the narrow grounds that the jury instructions failed to convey properly the elements of a crime under ' 1512(b)(2), and remanded for a possible new trial. The decision clarified the limits of ' 1512(b)(2) while leaving at least one important question unresolved. Perhaps more importantly, it may force a more narrow reading of the Sarbanes-Oxley Act with respect to document retention.
In The Courts
June 27, 2005
Recent rulings of importance to you and your practice.
Evasion of Foreign Tax Can Be Mail Fraud
June 27, 2005
The Supreme Court has decided that the Federal mail and wire fraud statutes can be used in prosecutions involving schemes to defraud a foreign government of tax revenue. The April 26 decision, written by Justice Thomas, expansively interpreted the words of 18 U.S.C. '' 1341 and 1343 and narrowly interpreted the common law "revenue rule," which some courts had viewed as limiting the reach of these statutes in cases involving foreign tax evasion. <i>Pasquantino v. United States</i>, 125 S.Ct. 1766 (2005).
The World Economic Forum
May 26, 2005
The hills were alive with the sound of Sarbanes-Oxley in January when the Swiss mountain resort of Davos hosted the World Economic Forum. Representatives of some of Europe's largest companies discussed the impact of the U.S. legislation on their operations, asking whether the impact of the additional regulation was worth the prestige of a New York listing or the opportunity to raise money on the world's largest capital market. It was reported that up to 60 European companies were ready to drop their U.S. listings.
A Roundtable Discussion on Leading Compliance Issues in the U.S. and EU
May 26, 2005
Throughout the world, Sarbanes-Oxley (SOX) legislation might well have had the biggest impact in corporate governance since the introduction of limited liability. To that end, jurisdictions outside the U.S. have not been idle. A recent Eversheds survey found more than 100 studies on the topic in 29 European countries within and outside the EU. Clearly, proper compliance to corporate governance guidelines is top of the list to in-house counsel across the EU, as well as the U.S. This roundtable sought to road-test some of these issues and look to some of the U.S.'s best governed corporations to see if there is a map for the journey ahead.
