5 - Major Event
Action: Cross-functional effort to modify corporate policies required ASAP

Details: There has been a lot of recent news about the increase in Foreign Corrupt Practices Act (“FCPA”) enforcement actions.  By all accounts, FCPA enforcement actions will continue to rise in 2010 and beyond.  In 2009, the Justice Department brought a record 26 actions and the SEC brought another 14 actions.  These actions focus not only on U.S. based corporations, but also saw a huge uptick in the prosecution of individuals which saw the prosecution of 44 individuals by the DoJ alone in 2009.    In fact, the SEC recently underwent a significant reorganization of its Enforcement Division and staffed a specialized unit  dedicated to FCPA enforcement.    The beefing up of “anti-bribery” enforcement is not isolated to U.S. regulators.  In May 2010, the U.K.’s “Bribery Bill” is expected to become law.  The “Bribery Bill” will also have a significant impact on U.S. corporations with British offices.

FCPA enforcement actions are usually high profile cases that receive significant publicity due to a variety of factors such as the corporations involved, interesting personalities, the sometimes exotic locals involved, the nature of the alleged improper conduct and the prospect of huge civil fines and criminal prosecution. 

The early 2010 FCPA enforcement actions are likely just the tip of the iceberg.  We can expect increased enforcement actions not only on certain companies, but on an industry-wide basis.

How Does This Affect My Enterprise?

• FCPA enforcement actions can be “bet the company” events with the huge potential for civil and criminal penalties.  As such, corporation’s legal and compliance departments must remain vigilant in their monitoring for potential violations. Included in these efforts, should be the appropriate training of a corporation’s employees on impermissible conduct under the FCPA and related statutes.
• FCPA enforcement actions involve the identification, processing and review of both common file types such as email, but also uncommon data types from transactional or financial databases.  A corporation’s legal and compliance teams should engage their IT colleagues to determine how this data would be identified, collected, processed and reviewed should an enforcement action hit.
• eDiscovery review platforms, such as Recommind’s Axcelerate eDiscovery, that have more than just keyword search functionality will be in high demand.  Legal and compliance professionals require review and analytical tools that are automated, conceptual search-based and have the ability to conduct predictive coding.  Review tools that only provide keyword searching will be inadequate for many reasons including that keyword searching alone can miss the use of code words which are common in FCPA actions. 
• Due to the need to conduct early case assessment to identify “red-flags” early in the investigation, firms and their legal counsel will need an eDiscovery review application that can quickly cull, organize and analyze email.  An eDiscovery platform such as Axcelerate eDiscovery will allow firms and their legal counsel to do what the regulators will do which is connect the dots between employees and foreign officials (especially in “high risk” countries) through communication mediums such as email. 
• Tight production deadlines require a review platform that can be deployed quickly on a hosted model like Axcelerate eDiscovery On-Demand.  Legal counsel will want to commence review of potentially responsive ESI as soon as possible (and often on a cross-border basis) which calls for a review tool that can be quickly deployed across multiple sites and reviewers.
• Firms that have deployed an in-place early case assessment, collection, processing, culling and preservation tool, like Recommind’s Insite Legal Hold, will be at a distinct advantage since they will be able to assess their data immediately, apply litigation holds where necessary and provide their outside legal counsel with data that is responsive as opposed to data sets filled with junk and spam.  All of which will reduce costs, quickly assess risks and meet production deadlines.
• Corporations should be aware that the regulators may not find illegal conduct under the FCPA, but may issue fines for a corporation’s ‘books and records ’ violation or lack of internal controls.