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Published On: April 23, 2013Categories: Fraud

Securities Fraud Whistleblower Nabs Clothing Company for Violations of the Foreign Corrupt Practices Act

Ralph Lauren has agreed to pay $1.6 million in penalties to the U.S. Securities & Exchange Commission to resolve claims that his business bribed foreign officials. It is a crime to pay bribes to foreign officials under the Foreign Corrupt Practices Act — and Act that was passed in 1977 to prevent American businesses, or businesses that operate here, from using bribery and corruption in foriegn business transactions. The fraud was uncovered by an internal whistleblower, and the company alerted the SEC and apparently fell on the proverbial sword.

The SEC considers FCPA violations to be securities fraud because, as one would naturally think, when it is committed by public or registered companies, their financial statements hide the payments, often socking them under “foreign investment” and calling them assets rather than costs. READ MORE