The Department of Justice (“DOJ”) recently announced that it is declining to prosecute Cognizant Technology Solutions Corporation (“Cognizant”) for paying bribes to government officials in India in violation of the Foreign Corrupt Practices Act (“FCPA”). In its declination letter, the DOJ cites multiple factors in its Corporate Enforcement Policy as reasons it chose not to prosecute.
The FCPA Corporate Enforcement Policy was adopted by the DOJ in November 2017. Among other things, it provides a presumption that the DOJ will decline to prosecute a company (absent aggravating circumstances) if the company (i) voluntarily self-discloses misconduct; (ii) fully cooperates; and (iii) timely and appropriately remediates.
In Cognizant’s case, it voluntarily self-disclosed the bribes within two weeks of its Board learning about them. It fully cooperated with the government’s investigation. And it remediated the problem, including firing and disciplining those involved in the wrongful conduct. Cognizant was also forced to disgorge all of its ill-gotten profits.
The purpose of the Corporate Enforcement Policy is to encourage companies to self-disclose their FCPA violations. Declination announcements, such as with Cognizant, are meant to demonstrate that the policy is working and to encourage companies in similar situations to come forward and self-report.
However, the decision about whether and when to self-disclose a violation of the FCPA remains complicated. For example, if the DOJ determines that aggravating circumstances are present, the benefit of self-disclosure is eliminated. Further, the Securities and Exchange Commission, which also has FCPA enforcement authority, is not bound by the Corporate Enforcement Policy.
When a company discovers a potential FCPA violation, it must carefully consider both the benefits and the risks associated with self-disclosure.
Heather Hatfield represents clients in corporate investigations, white-collar crime investigations and defense involving the Foreign Corrupt Practices Act (FCPA), complex contract disputes, oil and gas litigation ...
Blake Runions assists clients with broad range of business disputes and investigatory matters, including partnership disputes, internal investigations, and commercial litigation.
Prior to joining the Firm, Blake worked in the ...
Jamie Godsey represents public and private corporations, partnerships, and small companies on a broad range of complex business and commercial litigation. Her experience includes a wide variety of matters such as contractual ...
- Goldman Sachs Reaches Record $2.9 Billion Settlement of Malaysia FCPA Violations
- Recent Advisory Opinion Provides Important Guidance to Mitigate Sanctions Risk
- DOJ Releases Rare FCPA Opinion Procedure
- Essentra Settlement Demonstrates Government Commitment to Compliance Framework
- DOJ Updates Corporate Compliance Evaluation Guidance
- Political Retribution in Bridgegate Cannot Sustain Federal Fraud Convictions in Kelly v. United States
- Key Considerations in the Timing of FCPA Violation Disclosures
- Ensuring Compliance During the COVID-19 Pandemic
- Former Alston S.A. Exec’s FCPA Conviction Overturned
- Astros Scandal Demonstrates Importance of Tone at the Top