FCPA Due Diligence in M&AIssues in Forensic Accounting |
Although companies engaging in mergers and acquisitions are usually familiar with the traditional legal and financial due diligence that precedes a deal, there has been a recent shift in anti-corruption enforcement, in the United States and abroad, that is impacting due diligence practices.
From January 2006 to the end of 2008, the Securities and Exchange Commission (SEC) brought 38 Foreign Corrupt Practices Act (FCPA) anti-bribery enforcement actions – more than were brought in all prior years combined since the FCPA became law in 1977. Further, 2008 had by far the largest amount of fines and disagreements than in any other year.
Ed Rial, leader of the FCPA Consulting group at Deloitte Financial Advisory Services LLP; Kevin Corbett, Forensic & Dispute Services senior manager at Deloitte Financial Advisory Services LLP; and Mark Friedman, litigation partner at Debevoise & Plimpton LLP suggest that companies would be wise to consider expanding their M&A due diligence to include efforts aimed at uncovering possible corrupt practices. This can help to mitigate potential liability for the acquiring entity.
Read more in Edition 14 of ForThoughts, attached below.
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FCPA Due Diligence in M&A
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