The Albemarle Foreign Corrupt Practices Act (FCPA) enforcement action has presented invaluable lessons about the dangers posed by third parties. This enforcement action comes in a year that has been generally slow, particularly for the Department of Justice’s FCPA enforcement program. However, the SEC seems to straddle a more consistent pace, with the Albemarle and Clear Channel enforcement actions being its eighth and ninth respectively this year, according to the Volkov Law Group.
The Albemarle FCPA enforcement action, announced at a strategically opportune time, underscores the importance of stringent oversight over third-party relationships. This need for due diligence rings especially true for well-established corporations and large law firms. The Albemarle case demonstrates the potential risks of lax control and monitoring over third-party involvement.
The SEC’s proactive enforcement actions in this instance should serve as an indicator to corporations and law firms alike that regulatory bodies are on high alert. Vigilance in compliance is required at every level of business operations, especially when third-party engagements are involved. This is not limited to initial diligence but should extend into the ongoing management of these third-party relationships.
The remainder of the year may yet bring other high-profile enforcement actions. Legal professionals must be prepared for this new reality of increased regulatory scrutiny, especially in the realm of third-party relationships. The Albemarle case serves as a stark reminder of the potential vulnerabilities and legal liabilities lurking within.