In recent years, there has been an increased focus on enforcement actions by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in regard to the Foreign Corrupt Practices Act (FCPA), with particular attention to violations of the books and records provision of the Act. Accordingly, the need for forensic accounting experts who understand the nature of these foreign operations is of critical importance for companies at risk of being in violation of the Act.
Hemming Morse’s professionals working on FCPA matters possess specialized experience ranging from preventative consulting to transaction due diligence to acting as the formal compliance monitor of companies under deferred prosecution agreements. The team is led by a former special agent with the Federal Bureau of Investigation (FBI) who has been personally named a compliance monitor on multiple occasions.
Hemming Morse works closely with counsel to provide a collaborative, efficient and cost-effective investigation focused on advising clients on developing and maintaining an effective compliance program.
FCPA Compliance Monitor for Medical Device Company
A Hemming Morse partner was appointed as the FCPA compliance monitor for a $5 billion medical device company located in Europe, with its stock listed on a U.S. stock exchange. The company was required to name a monitor pursuant to a deferred prosecution agreement with the DOJ and Consent Decree with the SEC for violations of the FCPA. The assignment included reviewing worldwide company operations and making numerous site visits to Russia, China, and throughout Europe. Detailed reports of findings were issued to the DOJ and SEC on a periodic basis.
FCPA Investigation for NYSE-Listed Chemical Company
A NYSE-listed chemical company discovered corrupt payments during the due-diligence phase of a proposed acquisition of a chemical company based in Asia. Hemming Morse was then engaged to assist outside counsel with investigation of these alleged bribe payments and possible violations of the FCPA. Numerous interviews were conducted throughout Asia and the Hemming Morse team performed careful analysis and review of the business records of the entity being acquired. Critical issues in this matter included: (1) whether to go forward with the acquisition in light of the identified corrupt payments; (2) whether the culture and procedures of the entity being acquired could be changed to prevent future improper payments; (3) potential impact on sales revenue if the corrupt payments were to cease; (4) assessment of adjustments needed to the negotiated purchase price; and (5) determination of whether there would be successor liability to the acquiring company based upon the bad acts of the company in Asia.
FCPA Consulting for Pharmaceutical Company with Operations in China
Hemming Morse served as a consultant to a pharmaceutical company listed on a U.S. stock exchange, with significant operations throughout China. Our team was engaged following an ongoing investigation into the company for possible FCPA violations and made site visits to China on a quarterly basis to meet with company officials, review accounting records, and make recommendations for improvements to compliance policies and procedures. A critical component of this assignment involved providing findings to the DOJ and SEC as to whether the company was actively addressing compliance concerns.