SEC Whistleblowers Key to Uncovering Foreign Corrupt Practices Act Violations
On January 10, 2024, the Department of Justice (DOJ) announced that global software company SAP had agreed to pay over $220M for violations of the Foreign Corrupt Practices Act (FCPA) following an investigation by the DOJ and the Securities and Exchange Commission (SEC). SAP acknowledged that it had paid bribes to government officials to obtain public sector business in seven foreign countries. SAP then falsely recorded the bribes in its books and records as legitimate business expenses.
While the SEC is required to maintain the anonymity of whistleblowers and did not attribute the SAP recovery to a whistleblower, the largest SEC whistleblower award of all time — $279M paid in 2023 — reportedly related to a $1.1B recovery from telecom company Ericsson for violations of the FCPA.
In 2013, Getnick Law partners Neil V. Getnick and Lesley Ann Skillen, together with former Getnick Law Global Practice Counsel Luis Moreno Ocampo, foreshadowed the use of the then brand new SEC whistleblower program to uncover FCPA violations and provide a reward to the whistleblower of between 10% and 30% of the recovery. The FCPA prohibits bribery of foreign government officials by U.S. companies or persons, whether directly or through third-party intermediaries or agents. “U.S. companies” are not limited to companies based in the United States, but include companies listed on a U.S. exchange or required to file reports with the SEC. SAP, for example, is based in Germany but has American Depositary Shares listed on the New York Stock Exchange. The FCPA provides for fines of twice the gross profits from business attributable to the bribes.
The SEC and the Department of Justice are strong advocates for the role of whistleblowers in uncovering FCPA violations. “Foreign bribery is a scourge that must be eradicated” declares the DOJ’s FCPA Resource Guide. “It’s a fertile ground for whistleblowers because it’s an area that we don’t have any natural visibility into.” So said the Associate Director of the SEC’s Division of Enforcement in 2013. In 2023, the SEC received 237 whistleblower complaints relating to the FCPA.
Recoveries under the FCPA frequently reach stratospheric levels. In the past ten years, the top recoveries have spanned the globe and ranged from $700M to $3.3B.
Learn more about the SEC Whistleblower Program and Getnick Law’s Whistleblower practice.