News

Regulatory probes becoming more difficult, risky

American corporate executives and directors are becoming increasingly worried about the legal and business challenges that their institutions will face as a result of regulatory enforcement and legal probes.

At an educational roundtable last week, panel members said that the 2010 Dodd-Frank Act and the Foreign Corrupt Practices Act pose large risks to corporate entities. Enforcement of the Dodd-Frank is primarily the responsibility of the Securities and Exchange Commission, while the SEC shares oversight of FCPA with the Department of Justice, according to Reuters.

Many of Dodd-Frank’s provisions have yet to be finalized, and penalties resulting from FCPA charges can include felony convictions and substantial fines. Transgressions under those two pieces of legislation could also lead to exclusion from government contracts.

Dodd-Frank may also cause companies to conduct expensive internal investigations and then share the results with investors and government officials. To resolve the probes, companies may be forced to agree to highly intrusive outside monitoring.

Panelists advised companies to prepare for the worst-case scenario, as authorities at both the state and federal level work closer together and with the Department of Justice, Reuters reports.

Chief Marc Berger of the Manhattan U.S. Attorney’s securities fraud department said that refraining from invoking attorney-client privilege unless necessary will ensure that investigations will go smoother.

The U.S. Chamber of Commerce has made multiple attempts to try to dilute the FCPA, though the likelihood of amending the legislation is slim due to a lack of political support.

One Response to Regulatory probes becoming more difficult, risky

  1. Pingback: Daily Dodd Frank News | Dodd Frank News and Information