Foreign Corrupt Practices Act
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The Foreign Corrupt Practices Act prohibits U.S. companies from paying bribes to foreign officials. The Securities and Exchange Commission and Department of Justice enforce the FCPA. Individuals with information about international corruption that violates the FCPA can bring information to the government as whistleblowers and share in a percentage of the government’s monetary recovery in certain circumstances. Both the SEC and DOJ can bring civil actions against certain FCPA violators; the DOJ can also bring criminal cases against them.
What are the types of FCPA violations?
The FCPA has two parts: forbidding bribery and requiring specific accounting practices and internal controls so that companies keep accurate books and records.
Under the FCPA, bribes are defined broadly. They can include any payment or offer of payment of anything of value to a foreign official. A bribe could be in the form of money, including the offer to pay an official as a “consultant,” or in kind, like paying for gifts, trips, meals, etc. FCPA cases often involve companies bribing foreign officials in exchange for favorable contracts with foreign governments, advantages over competitor companies, help with licenses or permits, avoiding taxes or fines, or otherwise getting away with violations of foreign law.
The books and records requirement of the FCPA means that even if a company never pays bribes, but fails to keep appropriate records or to put in place monitoring systems to make sure it knows where its money is going, that could also be an FCPA violation. Companies must know where their money is going and must be able to show that they are keeping accurate records.
Who must comply with the FCPA?
Issuers of securities on U.S. national securities exchanges or companies who file SEC reports related to their securities on the U.S. over-the-counter market. The companies themselves, their executives, and their employees are covered.
Businesses incorporated in the U.S.
U.S. citizens (including those living abroad) and U.S. residents
In some circumstances, foreign nationals and companies. The FCPA can target foreign individuals and non-issuer companies that take action (or direct someone else to take action) within the U.S. to further a corrupt payment.
When can a whistleblower receive a whistleblower reward for reporting FCPA violations?
Because the SEC has joint jurisdiction over the FCPA with DOJ for FCPA by publicly traded companies, whistleblowers can report FCPA violations by publicly traded companies through the SEC Whistleblower Program. The CFTC Whistleblower Program may also provide an avenue to report FCPA violations in certain circumstances.
Who can blow the whistle on FCPA violations?
Tips about FCPA violations by publicly traded companies are filed through the SEC’s online Tips, Complaints, and Referrals system. Individuals can blow the whistle on FCPA violations anonymously if they are represented by an attorney. Whistleblowers do not need to be U.S. citizens or to be living in the U.S. to report an FCPA violation and be eligible for a whistleblower award. If the government collects at least $1 million through enforcement actions under the FCPA, then eligible whistleblowers can receive an award of 10-30% of the government’s recovery.
These descriptions of cryptocurrency fraud are general in nature and do not constitute legal advice. Cryptocurrency violations are complex and ever-evolving. The attorneys at Whistleblower Partners understand the complicated, constantly changing legal landscape and are happy to discuss any potential matter further.
If you would like more information or would like to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.