The Securities and Exchange Commission recently announced its first non-prosecution agreement with a company accused of violating the Foreign Corrupt Practices Act.
The landmark agreement with Ralph Lauren Corporation, relating to bribes the company allegedly paid government officials in Argentina, establishes a clear roadmap for avoiding significant fines and penalties for companies accused of foreign bribery and corruption. From attorneys at Skadden Arps:
“This case is a milestone in the SEC’s implementation of a broad set of policy initiatives in the last several years to encourage cooperation with its enforcement program. In addition to the development of mechanisms such as the NPA utilized here, those initiatives include similar mechanisms to recognize cooperation by individuals and a whistleblower program to reward individuals with cash payments for providing information that leads to an enforcement action.
The SEC emphasized that the conduct at issue was discovered by the issuer as it was implementing an FCPA compliance program, and that the issuer reported it to the SEC within two weeks of discovery. Clearly, the government viewed the company’s prompt response to that discovery and immediate self-reporting as commendable. Under the precedent set by Lauren, the SEC will be looking for: (i) self-reporting followed by extensive, thorough, real-time cooperation with both the SEC and the DOJ, including complete disclosure of the violative conduct, and (ii) a thorough review of existing compliance programs, with steps to update and improve compliance measures.”
Read the full update, SEC Announces First Non-Prosecution Agreement in an FCPA Matter - Skadden, Arps, Slate, Meagher & Flom LLP»