Foreign Corrupt Practices Act violations: How the SEC rewards FCPA whistleblowers

Foreign Corrupt Practice Act violations are a major target of US enforcement and are often exposed by whistleblowers.

The FCPA is a powerful anti-bribery law. The US welcomes whistleblowers with information about companies that are involved in the bribery of foreign officials and will reward whistleblowers through the US Securities and Exchange Commission (SEC) whistleblower reward program, if the information results in monetary sanctions exceeding $1 million.

The FCPA prohibits U.S. companies and individuals from paying money or any other sort of inducement to a foreign official to influence a decision or action affecting that company’s business.

“. . . Offshore does not mean off-limits,” said Robert Khuzami, the former SEC enforcement director, in a statement issued about an FCPA case.

The SEC and the Department of Justice, which jointly enforce the anti-bribery law, have become much more aggressive in recent years about pursing foreign bribery cases. Under the provisions of the Dodd-Frank Act, whistleblowers are entitled to 10 percent to 30 percent of the amount recovered in FCPA cases and cases involving other SEC violations.

US and international corporations have paid huge penalties to the US to settle FCPA cases. Telia Company AB, a Sweden-based telecommunications provider, set a record when it paid $965 million in 2017 to settle an FCPA case.

Congress passed the FCPA in 1977, partially as a result of two separate cases against Northrop Corp. and Phillips Petroleum brought by one of Phillips & Cohen’s founding partners and his public interest law firm that exposed the use of corporate funds to pay bribes in foreign countries.

If you would like to discuss your potential case involving an FCPA violation or other securities law violations, please use our encrypted whistleblower contact form for a free, confidential review of your case.

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