FCPA … the beat goes on

As we mentioned in our “Trends” posting last month, FCPA cases were at a high in 2008 and will continue upward in 2009.  Contract attorneys in DC, NYC, LA, Chicago, etc. have seen 2009 open with a flurry of FCPA and related litigation document reviews.   On his D&O blog yesterday, Kevin LaCroix references the January 5, 2009 memo from Gibson Dunn entitled “2008 Year-End FCPA Update.”   As the Gibson Dunn memo puts it, 2008 was ‘by any measure …a monster year in Foreign Corrupt Practices Act (‘FCPA’) enforcement.”

Among other points in the Gibson Dunn memo:

–  FCPA enforcement actions increasingly are accompanied by follow-on civil litigation. The memo notes that FCPA investigations increasingly have “spurred a variety of collateral civil suits, including securities fraud actions, shareholder derivative suits, and lawsuits initiated by foreign governments or business partners.” Companies “can no longer assume that making peace with DOJ and the SEC will end the pain associated with their alleged FCPA violations.”

–  With respect to securities litigation following on after FCPA investigations, the memo notes that “in recent years, courts have been trending towards finding that plaintiffs adequately alleged false or misleading statements, thereby meeting the heightened pleading standard under the PSLRA” leading to an expectation of even more follow-on litigations.

– The memo also reproduces a bar graph showing the foreign jurisdictions having the “dubious distinction of being the most-referenced setting for FCPA allegations.” Among the top countries are Nigeria, Iraq, China, Vietnam and Ecuador. 

–  The memo identifies a number of other important trends, including the increased internationalization of foreign anti-corruption endorsement.  Posse List members in Europe has seen an up tick in corruption related projects.

Side note:  LaCroix’s blog also has an analysis of law suits in the U.S. and related issues arising in the Satyam Computer Services accounting scandal in India.  As LaCroix states “the well of scandal is an ever-flowing stream, providing the plaintiffs’ bar with a constantly replenished source of new litigation targets. So much for the notion that the pool of potential securities litigation defendants is fished out.”

Good to hear, Kevin.  Let’s hope it leads to more work for contract attorneys.

For a link to the LaCroix blog click here.