Private Equity Investment and the FCPA

September 21, 2011

Enforcement of the Foreign Corrupt Practices Act has grown exponentially in recent years, and shows no signs of abating.  The DOJ and SEC, the U.S. regulators charged with enforcing the statute, continue to publicly affirm their commitment to the fight against corruption.  This enhanced enforcement environment reflects not only more penalties, but encroachment into more business areas, including those involved in financial services and investing not formerly associated with "paying bribes," such as private equity firms.  Private equity investors also may face efforts to hold them responsible for alleged corrupt activity at their portfolio companies.  Vigorous pre-acquisition due diligence and post-acquisition follow-up are now critical.

In their article, "Private Equity Investment and the FCPA," Joel M. Cohen and Adam P. Wolf of Gibson Dunn discuss the FCPA provisions, limits on the potential exposure facing private equity investors and the manageable steps that can be taken to avoid liability.

Reprinted with permission from the Review of Securities & Commodities Regulation, September 21, 2011, © 2011 RSCR Publications LLC.