FIFA Indictments and the Notion of Global Compliance

Well played?

Well played?

In an article by Joel Schectman for the Wall Street Journal and its “Morning Risk Report,” Jack Sharman is interviewed about the idea of a global compliance regime in light of the recent indictments of FIFA officials:

Jackson Sharman, a white collar specialist at Lightfoot, Franklin & White LLC, says that the case shows that the notion of a swelling, global compliance culture may be exaggerated. Attorneys and compliance professionals often make the mistake of believing their concerns about bribery are representative of the organizations where they work, he said. “It’s dangerous to assume that a legal regime is being internalized by everybody, because clearly it’s not,” Mr. Sharman said. “Assuming that others think the same way as you think can be fatal.”

Read the full article here: The Morning Risk Report: FIFA Allegations Shows Old School Bribery Lives On

Compliance drill.

Compliance drill.

There will doubtless be much fodder for discussion in the FIFA cases — bribery, FCPA, jurisdiction, cooperation and many more issues — but here here is a good place to start.


White-Collar Crime, DPAs and Repeat Business

Trying to keep your balance in a DPA.

Trying to keep your balance in a DPA.

The phenomenon of extending corporate deferred-prosecution agreements (or “DPAs”) continues, as here with medical device maker Biomet, and controversy inevitably ensues:

Life was supposed to return to normal for Biomet, the giant medical devices manufacturer accused of foreign bribery, when its federal probation expired next week. But on Tuesday, Biomet disclosed that prosecutors would extend its probation another year as they investigate new evidence of wrongdoing at the company, the Justice Department’s latest attempt to stem a widening pattern of corporate recidivism.

The Department of Justice, however, has been clear recently:

“Make no mistake: The criminal division will not hesitate to tear up a D.P.A. or N.P.A. and file criminal charges where such action is appropriate and proportional to the breach,” Leslie R. Caldwell, head of the Justice Department’s criminal division, said in a speech on Monday. “Just like an individual on probation faces a range of potential consequences for a violation, so, too, does a bank that is subject to a D.P.A.”

In the speech, Ms. Caldwell outlined her policy on repeat offenders in significant new detail. Noting that “we have a range of tools at our disposal,” she said the Justice Department could extend the term of a deferred-prosecution agreement while prosecutors investigate “allegations of new criminal conduct.” And when a breach has occurred, she said, “we can impose an additional monetary penalty” and “most significantly, we can pursue charges based on the conduct covered by the agreement itself — the very conduct that the bank had tried to resolve.”

We have written about DPAs and non-prosecution agreements (“NPAs”) here.

Builds wrist strength.

Builds wrist strength.

Note the reference to “a widening pattern of corporate recidivism.”  There may be such a pattern, and there are startling cases from  time to time, but hard data is scarce.  Anecdotally, we see few repeat white-collar customers on a significant scale, and for not unexpected reasons — cost, reputation and damage to stock price being the most common.