The Foreign Corrupt Practices Act

Under the SEC Whistleblower Program, whistleblowers may recover a reward for blowing the whistle on violations of the Foreign Corrupt Practices Act ("FCPA"). The FCPA is a federal statute that prohibits the bribery of foreign government officials by individual citizens of the United States or by United States companies. Under the SEC Whistleblower Program, eligible whistleblowers who report violations of the FCPA are entitled to a reward of between ten and thirty percent of any civil recovery obtained by an enforcement action brought by the SEC based on the information furnished by the whistleblower.

Common types of FCPA violations

There is a broad range of industries that have been implicated by violations of the FCPA, as well as a wide range of conduct associated with the underlying violation, but all boil down to the illegal payment of money or something of value to a foreign government official in order to obtain or retain business. Some of the most common FCPA violations include:

  • Payments to obtain government contracts;
  • Payments to customs officials to avoid or lower duties or clear goods without proper registration;
  • Payments to gain an advantage in a bidding process;
  • Payments to avoid taxes;
  • Payments to obtain a permit to open a factory or perform a particular operation;
  • Payments to influence a lawsuit.

Application of the FCPA

The FCPA applies to any individual, form, officer, director, employee or agent of a company and any stockholder with the authority to act on the company’s behalf. The FCPA also applies to individuals and companies which authorize or assist in another individual or company’s violations of the FCPA as well as foreign companies or individuals taking any action in furtherance of an illegal bribe under the FCPA while in the United States.

Eligibility for an award

The same eligibility requirements for whistleblowers under the SEC Whistleblower Program exist for the reporting of violations under the FCPA. Thus whistleblowers under the FCPA who voluntarily report original information of a violation to the SEC are entitled to a reward.

Protections under the Whistleblower Program

Similarly, FCPA whistleblowers are entitled to the same protections as whistleblowers reporting violations of the securities laws, including retaliation protection, confidentiality requirements for investigations, and, most notably, FCPA whistleblowers may report anonymously.

To learn more about reporting the FCPA or to request a free, confidential case evaluation, contact Stone & Magnanini’s FCPA Fraud Team.