HOW TO REPORT FCPA VIOLATIONS

If you are interested in reporting an FCPA violation, contact us now to find out if you can get a whistleblower award.  

The Foreign Corrupt Practices Act (FCPA) is a U.S. law that prohibits bribery. The FCPA is enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC), which regularly fines companies for violating the FCPA. Of note, the SEC also issues million-dollar awards to people who report FCPA violations. However, the SEC receives tens of thousands of tips annually, and poorly drafted submissions are often discarded. If you want to know how to report FCPA violations while minimizing room for error, here are five important steps to take:

1. Speak To An Experienced Attorney 

If you are thinking of reporting an FCPA violation, it is critical that you speak with an experienced FCPA attorney. If you report an FCPA violation to your employer or someone else before speaking with an attorney, you may face retaliation or lose out on the possibility of claiming a whistleblower award. This can happen even if your employer offers ‘confidential’ reporting or a ‘whistleblower hotline.’ FBR has experienced FCPA attorneys and offers free consultations that are entirely confidential. Speaking to an attorney on how to report FCPA violations will cost you nothing, assist you in reporting the FCPA violation, and often, the attorney may be able to report the FCPA violation on your behalf.  

2. Get Familiar With The Elements Of An FCPA Violation

Whether you are reporting the violation yourself or using an attorney, the DOJ and SEC will expect you to have some basic knowledge about the FCPA. This means you should get familiar with the elements of an FCPA violation before reporting. This is something you can discuss with your attorney, or check our article on how to recognize an FCPA violation.  The key elements for how to report FCPA violations will be describing the government official involved, the item of value that was given or promised to them, and the motivation for the actions.

The only crimes eligible for a whistleblower reward are those against laws enforced by the SEC. The SEC is very interested in investigating crimes involving bribery or corruption– which also result in large fines if they fall under the FCPA. An important step in learning how to report FCPA violations is learning how to provide specific, detailed information to the SEC. In order to properly submit a tip on a company engaging in bribes, you’ll need to be able to identify the form of the bribe as well as what the company received in return for the bribe.

FCPA reporting can also include accounting violations. If you know bribery has occurred but you don’t have all the details, your report may be able to report accounting violations associated with the bribe. Evidence of an accounting violation could be a failure to keep accurate books and records, a failure to conduct appropriate audits of payments, or even a failure to implement sufficient anti-bribery compliance policies. Even if neither you nor the SEC can prove a bribe has actually taken place, companies can still be held liable for improper payments that were not accurately recorded. Understanding the subtleties of the FCPA is vital to learning how to report FCPA violations. 

A qualified attorney can help you identify the exact crime involved in your FCPA reporting. At FBR, not only will we help you organize your evidence, but we will also draft the claim submission on your behalf to ensure there are no mistakes in the reporting process.

3. Gather Evidence To Support Your Claim 

In addition to reporting what you have witnessed, you can also supply documents, emails or other evidence to support the claim. This step in how to report FCPA violations will help convince the DOJ and SEC to investigate the FCPA violation. However, it is also important that you do not obtain evidence illegally, such as by accessing other people’s property or devices without their permission. When figuring out what evidence to gather, your attorney will be able to advise what it is safe to collect and what it is not. Even if your employer has made you sign a Non-Disclosure Agreement (NDA), you are always entitled to speak to your attorney about these issues without breaching the NDA.

4. Decide Where To Report First 

Knowing how to report FCPA violations means knowing who to report them to. When reporting an FCPA violation, you may be entitled to a whistleblower award for reporting and potentially protection from retaliation. However, much of this could depend on who you report to first. For example, certain U.S. laws provide protections for individuals who report FCPA violations to federal regulators like the SEC and DOJ. However, those protections do not apply if the person only reports to their employer. Similarly, reporting a violation only to the DOJ but not the SEC may affect your ability to claim an award. It’s valuable to work with an experienced attorney who knows how to report FCPA violations to maximize your reward potential. In 2021, the SEC paid a whistleblower $28 million for reporting FCPA violations. 

5. Don’t Delay In Reporting

Both the SEC and DOJ have specific time limits in which they can prosecute FCPA violations.  For certain violations, this could be as long as 5 years, but the average FCPA investigation is likely to be around 3 years. If you want the SEC and DOJ to investigate a violation, you need to give them as much time as possible by reporting early. Moreover, if someone reports the same information you have before you do, they will get the whistleblower award because they understood that time is of the essence when learning how to report FCPA violations.  Even if you are the only person with the information, the SEC can reduce a person’s award if they are delayed in FCPA reporting.