One of the oldest tools the Securities Exchange Commission (SEC) has to help reduce fraudulent activities and protect investors in this more connected and globalized world is the Foreign Corrupt Practices Act (FCPA). The FCPA provides a reward of 10%-30% of collected monies worth over $1 million recovered by a successful enforcement action by the SEC. This percentage is paid to individuals who provide relevant information that proves useful to the SEC in an enforcement action against a wrongdoer. This program was first implemented in 1977. It prohibits any public company under the SEC’s jurisdiction from bribing any foreign official to get government contracts or any type of preferential treatment from a foreign government. The best part about the FCPA is that this prohibition still applies even if the company is foreign and the bribed official is foreign and the bribing took place on foreign soil, as long as the public company trades in the US or is under any type of SEC jurisdiction, they are subject to the FCPA.
Unfortunately, fiscal year 2021 was not a good year for FCPA enforcement, mainly because of the pandemic halting international business and government enforcement activities. The number of enforcement actions was half of the ten-year average of 36 enforcement actions, with only 18 taking place in 2021. Newly disclosed investigations were also down, with only three new investigations disclosed by companies when we have had years with 30 or more disclosures. Thankfully, in its recent report on FY 2021, the SEC reaffirmed its commitment to evaluate and implement the FCPA as much as possible to help curb the growing problem of foreign corruption affecting the US.
Do you have a valid claim?
If you witnessed any widespread suspicious activity within your workplace, you might have a chance of becoming a whistleblower by reporting an ongoing fraudulent scheme. However, to increase your chances of success, you must be sure to back up your claim with substantial evidence or privileged information.
A Quick Whistleblower Checklist
Is the fraudulent scheme widespread enough?
Has the fraud been perpetuated for years or involves large sums of money?
Do you possess any physical evidence of the fraud (documents, forged signatures)?
Do you have access to privileged information which may help our investigators?
Do you work as an insider within the company perpetrating the fraud?
Did you witness any ongoing illegal behavior within your workplace?
Have you been forced into taking part in any suspicious corporate activity?
