More On Legal & Compliancefrom The Advisor's Professional Library
- Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices. Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
- Differences Between State and SEC Regulation of Investment Advisors States may impose licensing or registration requirements on IARs doing business in their jurisdiction, even if the IAR works for an SEC-registered firm. States may investigate and prosecute fraud by any IAR in their jurisdiction, even if the individual works for an SEC-registered firm.
The Securities and Exchange Commission and the Department of Justice released Wednesday A Resource Guide to the U.S. Foreign Corrupt Practices Act, a 120-page detailed analysis of the U.S. Foreign Corrupt Practices Act that closely examines the SEC and DOJ approach to FCPA enforcement.
According to the SEC and DOJ, the guide provides “helpful information to enterprises of all sizes from small businesses doing their first transactions abroad to multinational corporations with subsidiaries around the world.”
The SEC says the guide addresses a wide variety of topics, including: who and what is covered by the FCPA’s anti-bribery and accounting provisions; the definition of a “foreign official”; what constitute proper and improper gifts, travel and entertainment expenses; facilitating payments; how successor liability applies in the mergers and acquisitions context; the hallmarks of an effective corporate compliance program; and the different types of civil and criminal resolutions available in the FCPA context.
On these and other topics, the guide takes a multi-faceted approach toward setting forth the statute’s requirements and providing insights into SEC and DOJ enforcement practices. It uses hypothetical situations, examples of enforcement actions and matters that the SEC and DOJ have declined to pursue, and summaries of applicable case law and DOJ opinion releases.
Robert Khuzami, director of the SEC’s Division of Enforcement, said in a statement that “Investors must have faith that the economic performance of public companies reflects lawful considerations of markets, price, and product rather than a mirage resulting from bribery and corruption." This guide, he said, "will protect investors by assisting businesses in preventing such unlawful behavior, thus avoiding FCPA violations in the first place, which is in the interest of law enforcement and business alike.”
Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division added in the same statement that, “The fight against corruption is a law enforcement priority of the United States. Our FCPA enforcement is critical to protecting the integrity of markets for American companies doing business abroad, and we will continue to make clear that bribing foreign officials is not an acceptable shortcut. The guide is an important illustration of our transparency and a useful reference for companies and individuals who wish to act responsibly and in compliance with the law.”