In recent months, the U.S. Department of Justice (DOJ) and Securities & Exchange Commission (SEC) have announced several notable penalties for violations of the U.S. Foreign Corrupt Practices Act (FCPA). The FCPA prohibits bribery of foreign government officials and requires issuers of securities on U.S. exchanges to keep and maintain accurate books and records and robust internal controls.
We have summarized a few of these enforcement actions below to serve as a reminder of the various ways in which companies can fall afoul of the FCPA.
Goldman Sachs Pays Largest-Ever FCPA Penalty
In October 2020, Goldman Sachs Group Inc. (Goldman Sachs) agreed to a $3.3 billion penalty to resolve allegations that the company and its Malaysian subsidiary violated the FCPA by making payments to a Malaysian sovereign wealth fund 1Malaysia Development Berhad (1MDB). This represents the largest-ever FCPA penalty imposed on a company.
The DOJ and SEC alleged that senior employees of Goldman Sachs used a third-party intermediary to bribe high-ranking government officials in Abu Dhabi and Malaysia. The improper payments were allegedly made by Goldman Sachs to assist with efforts to obtain business from 1MDB.