Mind Your Flanks: Collateral Litigation Associated with FCPA Actions

When allegations of foreign bribery surface — whether from news reports, a whistleblower submission, or otherwise — companies move aggressively to address the many issues associated with a potential investigation by the U.S. Department of Justice (DOJ) and/or the U.S. Securities and Exchange Commission (SEC). With U.S. Foreign Corrupt Practices Act (FCPA) fines and penalties that can stretch into the hundreds of millions of dollars, and the U.S. government’s well-documented increased enforcement of the FCPA reflecting a fervent commitment to root out corruption, such attention certainly is not misplaced.

However, addressing only the investigation and remediation of potential FCPA violations may not be enough to protect your client. In-house and outside counsel must also mind their flanks, because collateral litigation is a fact of life when FCPA investigations become public. Counsel’s internal investigation and enforcement defense must take into account the likelihood of parallel litigation.

This article describes the range of potential collateral litigation and sets out a series of considerations for counsel as they manage FCPA actions.

Originally published in Business Crimes Bulletin, reprinted with permission.