company. No enforcement action was taken against the suc- cessor, but the predecessor company pleaded guilty to one count of violating the FCPA and agreed to pay a $2 million fine.'” Later, four executives from the predecessor company were convicted of FCPA violations, three of whom received terms of imprisonment.”
On occasion, when an enforcement action has been taken against a predecessor company, the succes- sor seeks assurances that it will not be subject to a future enforcement action. In one such case, a Dutch predeces- sor resolved FCPA charges with DOJ through a deferred prosecution agreement.’ While both the predecessor and successor signed the agreement, which included a commitment to ongoing cooperation and an improved compliance program, only the predecessor company was charged; in signing the agreement, the successor company gained the certainty of conditional release from criminal liability, even though it was not being pursued for FCPA violations.!”> In another case, after a Connecticut-based company uncovered FCPA violations by a California company it sought to acquire, both companies voluntarily disclosed the conduct to DOJ and SEC.'% The prede- cessor company resolved its criminal liability through a non-prosecution agreement with DOJ that included an $800,000 monetary penalty and also settled with SEC, paying a total of $1.1 million in disgorgement, pre-judg- ment interest, and civil penalties. The successor company proceeded with the acquisition and separately entered into a non-prosecution agreement with DOJ in which it agreed, among other things, to ensure full performance of the predecessor company’s non-prosecution agreement. This agreement provided certainty to the successor con- cerning its FCPA liability. '””
Importantly, a successor company’s voluntary disclo- sure, appropriate due diligence, and implementation of an effective compliance program may also decrease the likeli- hood of an enforcement action regarding an acquired com- pany’s post-acquisition conduct when pre-acquisition due
diligence is not possible.!”*
The FCPA:
Anti-Bribery Provisions
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