FCPA broker-dealer case highlights compliance risks for financial institutions

Abstract

Purpose

The purpose of this paper is to provide suggestions to the banking and finance sectors on managing FCPA risks in light of a May 2013 FCPA enforcement action against employees of a US broker-dealer.

Design/methodology/approach

The paper provides details of the May 2013 enforcement action, cites other FCPA enforcement actions in financial services, discusses various types of FCPA risks for financial services firms, lists elements the US and UK governments have considered in evaluating companies' anti-bribery compliance policies and controls, and recommends measures for financial services firms to limit FCPA risks.

Findings

The early May FCPA enforcement action makes clear that the financial services industry is very much on the radar screen of the US Securities and Exchange Commission and Department of Justice.

Practical implications

A general response to limiting FCPA risk should include the development of an effective FCPA compliance program and adequate due diligence into potential third-party partners and target companies. Recent industry experience shows the potential protection in careful and comprehensive FCPA risk identification and risk management efforts.

Originality/value

The paper provides practical guidance from experienced financial services lawyers.

Citation

Urofsky, P. and Newcomb, D. (2013), "FCPA broker-dealer case highlights compliance risks for financial institutions", Journal of Investment Compliance, Vol. 14 No. 3, pp. 34-37. https://doi.org/10.1108/JOIC-09-2013-0029