• US Securities and Exchange Commission and Department of Justice Clarify “Best Practices” for FCPA Compliance
  • January 11, 2011 | Authors: Joseph De Simone; Kyle J. Steinmetz; John J. Tharp
  • Law Firms: Mayer Brown LLP - New York Office ; Mayer Brown LLP - Chicago Office ; Mayer Brown LLP - Washington Office
  • A recent Securities and Exchange Commission (SEC) and Department of Justice (DOJ) settlement provides companies with guidelines to follow in order to limit exposure under the Foreign Corrupt Practices Act (FCPA). On December 10, 2010, the SEC and DOJ announced a settlement in their FCPA enforcement action against RAE Systems, Inc. In its action against RAE, the SEC alleged that the company, through its Chinese joint venture entities, made payments of approximately $400,000 to Chinese officials, which allegedly resulted in RAE-affiliated entities winning contracts worth approximately $3 million in revenues. The SEC further alleged that RAE lacked sufficient internal controls and failed to act on red flags raised by the conduct of its Chinese joint venture partners. As part of the settlement, RAE agreed to disgorge the $1,147,800 of profits collected and pay prejudgment interest.