Cooperation Resulting In Waiver

Just days before a potentially landscape-altering hearing in a Miami federal courtroom at which lawyers were going to be forced to testify about the legal advice they had given their clients during the course of an internal investigation, the parties quietly backed into their own corners and the hearing was cancelled.

But the close call should send shivers down the back of company counsel conducting internal investigations of potential Foreign Corrupt Practices Act (FCPA) violations, especially as they and their outside advisers consider whether and how to participate in the Department of Justice's (DOJ) formalised FCPA enforcement policy.

The policy requires voluntary disclosure to and fulsome cooperation with DOJ prosecutors in exchange for a much sought after declination of prosecution. The costs of this new policy, however, are likely to be steep as illustrated by the court's decision in Sec. & Exch. Comm'n v. Herrera (2017), in which a federal magistrate judge