USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
2.3 Financial Record-Keeping The FCPA requires “issuers” (generally speaking, enti - ties whose securities are registered with the SEC and/ or entities that are required to file periodic reports with the SEC) to keep accurate books and records and to establish and maintain a system of internal con - trols adequate to ensure that the company’s assets are managed in compliance with management’s instructions. For accounting violations, the SEC may impose civil penalties, seek injunctive relief, enter a cease-and-desist order and require disgorgement of tainted gains. Civil fines may be up to a maximum of USD963,837 for a corporation or USD192,768 for an individual, or the gross amount of the pecuniary gain per violation. Neither materiality nor knowledge is required to establish civil liability. The DOJ has authority over criminal accounting vio - lations (ie, where persons “knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any book, record, or account” required to be maintained under the FCPA). Penalties for criminal violations of the FCPA’s accounting provisions are set forth in 5. Pen- Numerous federal statutes cover public officials’ con - duct. For example, prosecutors may charge corrupt public officials for conduct related to: • theft, wrongful conversion, embezzlement, or bribery related to or involving federal property or federally funded programmes (18 USC, Sections 641, 654, and 666); • conflicts of interest, generally caused by federal officials engaging in official acts that could affect their personal financial interests (or those of their family members, their future employers, or certain affiliated organisations (18 USC, Sections 207–08); and alties for Violations . 2.4 Public Officials • acting with the specific intent to deprive the gov - ernment of its intangible right to “honest services”, such as the public official’s uncompromised judg - ment, discretion, etc (18 USC, Section 1346).
The bribery of foreign public officials is also criminal - ised. The FCPA prohibits corrupt payments to foreign public officials for the purpose of obtaining or retaining business opportunities. Likewise, foreign bribery may be prosecuted under the Travel Act. Commercial bribery is primarily regulated by state rather than federal law. For example, New York Penal Law, Section 180.00 provides that “[a] person is guilty of commercial bribing in the second degree when he confers, or offers or agrees to confer, any benefit upon any employee, agent or fiduciary without the consent of the latter’s employer or principal, with intent to influence his conduct in relation to his employer’s or principal’s affairs”. Because several US states have criminalised commercial bribery, the DOJ has taken the position that violations of such state commercial bribery laws can be predicate offences under the Travel Act. Federal prosecutors may also charge private bribery or kickback schemes as mail or wire fraud under an “honest services fraud” theory. 2.2 Influence-Peddling No federal criminal statute uses the term “influence- peddling”. As noted elsewhere, conduct involving improper use of official authority, especially where a private party receives an “undue advantage”, may violate a variety of federal or state laws, including the federal fraud and conflict of interest statutes, abuse-of-power laws, or lobbying regulations. The FCPA specifically prohibits giving things of val - ue to a foreign official for purposes of “securing any improper advantage” in connection with obtaining or retaining business. Conduct involving foreign officials may also implicate federal or state laws on fraud, conflicts of interest, or lobbying. Acting on behalf of foreign officials may also violate the US law requiring foreign government agents to register with the federal government.
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