The SEC is signaling loud and clear that it is eager to receive whistleblower information about FCPA violations.
The Foreign Corrupt Practices Act (FCPA) prohibits companies with ties to the U.S. from bribing foreign officials to gain business favor or advantage overseas. Those caught doing so risk stiff civil and criminal penalties, often in the eight- and nine-figure range. Because the SEC shares FCPA enforcement responsibilities with the Department of Justice, whistleblowers with information concerning FCPA violations can bring these claims through the SEC’s Whistleblower Program, potentially receiving an award of up to thirty percent of any government recovery.
Two recent SEC actions strongly suggest that the SEC is pushing hard to get whistleblowers more involved in its FCPA enforcement efforts. On September 28, the SEC obtained a $6 million settlement from Belgium beer giant Anheuser-Busch InBev (AB InBev), related to alleged bribes paid to Indian officials. Importantly, this settlement came after a whistleblower had worked with the SEC to uncover AB InBev’s scheme. AB InBev then improperly forced the whistleblower to sign a separation agreement that contained clauses imposing a fee for communicating with government agencies. Such anti-whistleblower gag clauses are illegal thanks to the SEC’s extensive whistleblower-retaliation protections. The SEC’s settlement thus imposed not only a penalty on AB InBev for its FCPA actions, but also for its efforts to discourage and punish whistleblowers for trying to report FCPA violations.
This settlement comes only a month after the SEC paid out what appears to be the agency’s first FCPA-related whistleblower award. In late August, the SEC awarded a whistleblower who helped the SEC uncover a bribery scheme by Australian mining company BHP Billiton at the 2008 Beijing Olympics. BHP Billiton had played host to a number of Asian and African leaders during the Olympics celebration, providing them with luxury accommodations and fancy meals. Those leaders just happened to be from countries with rich natural resources where BHP Billiton clearly wanted to do business.
Although the SEC originally learned of the misconduct in news reports, a whistleblower came forward with significant information that contributed to the success of their investigation. In return, the SEC awarded the whistleblower $3.75 million.
These two cases provide welcome evidence that the SEC is taking seriously the significant value a well-placed whistleblower can add to an FCPA investigation. As the SEC continues to develop its fledgling whistleblower program more generally, FCPA violations are likely to play a bigger and bigger role in the SEC’s whistleblower docket.
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