Last week witnessed a significant development in the realm of the Foreign Corrupt Practices Act (FCPA) as the Department of Justice (DOJ) decided not to prosecute Lifecore, a preeminent U.S. biomedical company. The reason behind this major decision traces back to Lifecore’s voluntary disclosure of corruption charges tied to a company it had acquired.
The acquired company was found to have taken part in underhanded practices, which included the disbursement of bribes to Mexican officials and document falsification. These illicit activities took place both preceding and following the acquisition by Lifecore. However, Lifecore’s transparent approach in lining out these violations to the DOJ resulted in the government agency refraining from pursuing legal charges against Lifecore.
These circumstances highlight the value in voluntary self-disclosure of FCPA violations. It shows how a proactive and transparent approach in dealing with potential litigation can positively influence the decision of legal authorities. Such proactive approaches can provide corporations with a way to mitigate potential legal risks and associated reputational damage.
What this means for legal professionals overseeing acquisitions and mergers, especially those with multinational corporations, is that there should be a further emphasis on thorough due diligence. Parties involved in these transactions need to ensure that all potential liabilities, especially around corrupt practices, are fully disclosed. This not only saves businesses from potential legal ramifications but can also strengthen their standing in the corporate landscape in the long term.
For a detailed account, read the full report on JD Supra.