The Hidden Costs Of FCPA-Related Corporate Transparency

Law360, New York (September 18, 2015, 11:57 AM EDT) -- Companies that choose to inform shareholders of their Foreign Corrupt Practices Act compliance procedures should be increasingly cautious of the language they employ in publicly available ethics codes or corporate responsibility reports. Although the FCPA encourages the adoption of rigorous internal compliance controls, recent federal court decisions suggest that companies that publicize details of their compliance commitments could actually increase their risk of civil liability in shareholder lawsuits that follow FCPA investigations. Courts are allowing cases to proceed on the basis that pretty general statements about compliance policies and goals can mislead investors. In other words, the scope of what is mere puffery is shrinking before our eyes. Your company's public pronouncements need to be inventoried and considered against evolving standards now....

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