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Chadbourne FCPA Study Reveals Six-Year Trend in Anti-Corruption Enforcement Against Individuals

Senior Executives are Most Likely to Be Charged and Risk of Prosecution is Greatest for Bribes Paid in Mexico, Central and South America

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NEW YORK, Oct. 4, 2011 /PRNewswire/ -- A new report issued by international law firm Chadbourne & Parke LLP today uncovers recent patterns in enforcement of the Foreign Corrupt Practices Act (FCPA), a U.S. law that makes it illegal to directly or indirectly bribe a non-U.S. government official for a business advantage.

The Chadbourne Compliance Quarterly Special Report, authored by partner M. Scott Peeler, reviews the circumstances surrounding 61 individuals who were the subject of government-initiated civil or criminal action alleging FCPA violations in the past six years. In particular, Mr. Peeler analyzed the data concerning the individuals' job title/position, region in which the alleged misconduct took place, amount of alleged improper payments, and the impact the individual's level of knowledge had on the type of action filed.

The study found the following:

  • The majority of those studied who were charged with civil and/or criminal FCPA violations held the titles of President, Chief Executive Officer or Chief Operating Officer of their organizations.
  • Alleged bribes paid in Mexico, Central and South America were the areas most often linked to these prosecutions, accounting for 44% of the cases studied.  The other regions in descending order were Asia (32%); Africa (21%); and Europe (3%).
  • While the risk of civil and/or criminal liability increased as the amount of bribes alleged paid increased, it was interesting that there were almost as many cases where the total amount of bribes were between $100,000 - $500,000 and $500,000 - $1,000,000 as there were between $1,000,000 - $2,500,000.

As an individual's level of knowledge and/or involvement in the alleged bribe increased, the risk of civil and criminal charges being filed grows substantially.  Of the cases in which an individual had direct knowledge of and took action relating to the alleged bribe, 44 led to criminal charges, while two individuals with only indirect knowledge faced only civil actions.

The Chadbourne study comes at a time when anti-corruption compliance has taken on increased importance for companies worldwide.  The U.S. government last year initiated a record number of FCPA enforcement actions and penalties associated with FCPA violations have become increasingly severe.  Companies are also facing scrutiny in light of the recent enactment of the UK Bribery Act, a British anti-corruption law that Mr. Peeler has termed "the FCPA on steroids."

"It is becoming clear that FCPA enforcement is not just limited to companies that fail to maintain the highest ethical and anti-corruption standards but to its executive management as well," stated Mr. Peeler, who advises some of the world's largest companies on white collar litigation, government investigations and compliance from Chadbourne's New York office.

"Companies must put in place the strictest anti-corruption controls where they are needed most and train and keep training its employees, managers and high risk third party service providers so they fully appreciate the risks of non-compliance," he said, "and truly take a zero-tolerance message to heart.  The price of not doing so is just too high."

About Chadbourne & Parke LLP

Chadbourne & Parke LLP, an international law firm headquartered in New York City, provides a full range of legal services, including mergers and acquisitions, securities, project finance, private funds, corporate finance, venture capital and emerging companies, energy/renewable energy, communications and technology, commercial and products liability litigation, arbitration/IDR, securities litigation and regulatory enforcement, special investigations and litigation, intellectual property, antitrust, domestic and international tax, insurance and reinsurance, environmental, real estate, bankruptcy and financial restructuring, executive compensation and employee benefits, employment law, trusts and estates and government contract matters. Major geographical areas of concentration include Russia, Central and Eastern Europe, Turkey, the Middle East and Latin America. The Firm has offices in New York, Washington DC, Los Angeles, Mexico City, Sao Paulo, London, Moscow, Warsaw, Kyiv, Almaty, Istanbul, Dubai and Beijing. For additional information, visit www.chadbourne.com.

SOURCE Chadbourne & Parke LLP



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