Español
FCPA Penalties
The Securities and Exchange Commission is charged with enforcing violations of the accounting provisions while the Department of Justice is primarily responsible for enforcing the anti-bribery provisions. Both agencies can institute civil actions, but only the Department of Justice is authorized to file criminal charges.
Penalties for individuals: Anti-bribery provisions
- Civil penalty up to $10,000
- Criminal fine up to $250,000 and or imprisonment up to 5 years
- Under the Alternative Fines Act, the fine may be increased to twice the gross financial gain or loss resulting from the corrupt payment.
- A criminal fine imposed on an individual cannot be paid directly or indirectly by the company on whose behalf the person acted.
Penalties for entities: Anti-bribery provisions
- Civil penalty up to $10,000
- Criminal fine up to $2 million
- The Alternative Fines Act may increase the criminal fine to twice the gain or loss resulting from the corrupt payment.
Penalties for individuals: Accounting provisions
- Civil penalty up to $100,000
- Criminal fine up to $5 million or twice the gain or loss caused by the violation, and or imprisonment up to 20 years
- Fines cannot be paid directly or indirectly by the company on whose behalf the person acted.
Penalties for entities: Accounting provisions
- Civil penalty up to $500,000
- Criminal fine up to $25 million or twice the gain or loss caused by the violation
In the News“On May 6, 2008, an ironworkers’ pension fund filed a shareholders’ derivative action in federal court on behalf of aluminum producer, Alcoa, Inc. (“Alcoa”), against certain current and former officers and directors.1 The complaint stems from allegations that Alcoa paid millions of dollars in bribes to Bahraini government officials over a fifteen-year period, in violation of the Foreign Corrupt Practices Act (“FCPA”) and other applicable laws. The Alcoa derivative complaint is the latest example of a parallel civil suit arising out of allegations and investigations concerning FCPA violations. Although there is no private right of action under the FCPA,2 private parties have found ways to incorporate bribery allegations into other theories of civil liability, including breach of fiduciary duty and fraud. For this reason, private litigation is becoming a “third front,” alongside DOJ prosecution and SEC enforcement, on which companies facing FCPA problems must defend themselves.” |
