Why the SEC’s Aggressive FCPA Actions Are Useless: Wal-Mart Stores, Inc. (WMT)

When corruption and bribery stems from executives acting independently and without authorization from the company, even the most comprehensive compliance audits may never discover secret deals and agreements like the ones made by employees at Noble Corporation and Morgan Stanley. However, a greater threat exists when FCPA violations are part of a conspiracy, and evidence is either covered up or disregarded entirely by the company, as was the case with Wal-Mart de Mexico’s construction efforts in Teotihuacán. Despite clear evidence of more than $24 million in bribes uncovered by Wal-Mart’s internal investigation, the company shut down the investigation and failed to notify the proper authorities.

The point here is that, although international companies can create compliance departments and take steps to educate employees about adherance to FCPA regulations, the practice of greasing the wheels in other countries by lining the pockets of foreign officials will still continue, whether by rogue agents acting out of greed and desire for personal gain or by the companies as a whole. Conspiracy theorists can have a field day here, imagining a group of faceless men in black suits sitting around a conference table in a dark, smoky room.

The article Why the SEC’s Aggressive FCPA Actions Are Useless originally appeared on Fool.com and is written by Greg Gambone.

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