Research, Reports & Publications

Catch Those Red Flag Warnings Early, Or The SEC Will

Jan 23, 2015 3:20 PM ET

Global corruption risk can be detected early by addressing red flags that could hint a violation of the Foreign Corrupt Practices Act (FCPA). In Samuel Rubenfeld’s article published in the Wall Street Journal, he highlights a company who “ignored multiple red flags that would have led it to unearth a scheme at an early stage.”

Although the company was heavily fined and penalized, its FCPA compliance training and cooperation with the Securities and Exchange Commission (SEC) led to a settlement that assisted the SEC in resolving the case.

 “PBSJ “took quick steps to end the misconduct,” and it voluntarily made witnesses available for interviews, as well as provided factual chronologies, timelines, internal summaries and full forensic images, the SEC said.”

This article highlights the actions that should be taken prior to a violation, and also how to react after being fined,

  • Addressing and not ignoring red flags
  • Not denying file access to the SEC
  • Cooperating to reach a settlement

For more information on detecting red flags in the early stages of a potential violation, A Case Study Roadmap: Addressing Global Corruption Risk, offers valuable insight and possible solutions for anyone conducting business locally and globally. Click here for more information.