Foreign Companies Facing FCPA Investigations Often Reveal Which U.S. Law Firm They’ve Hired

SEC rules don’t require reporting companies to reveal the names of law firms hired to investigate potential FCPA offenses, but many do. Companies based in other countries with securities registered in the U.S. are four times more likely than domestic public companies to disclose the names of law firms investigating their potential FCPA-related offenses. That adds up to about ten percent of companies that disclose investigations. FCPA allegations may have a bigger impact on foreign companies. Being contacted by the FBI and served with subpoenas from U.S. government agencies come as a shock, and the name of the law they’ve allegedly violated — the Foreign Corrupt Practices Act— is provocative. They are also aware that follow-on consequences often include investigations by local agencies, press inquiries and questions from local stakeholders. But foreign companies also know that they gain credibility with the DOJ and SEC by retaining a law firm with recognized FCPA expertise. The same factors apply to U.S. companies. Some of them, but far fewer, are likewise motivated to disclose the names of law firms they’ve retained.