SEC Continues Crackdown on Illegal Payments

On January 15, 2002, the Securities and Exchange Commission (SEC) settled a case against BellSouth Corporation involving alleged violations of the Foreign Corrupt Practices Act (FCPA). This case is part of an ongoing crackdown on illegal payments by publicly-owned companies and is believed to be the fifth in a series of cases brought by the SEC in the last 13 months for corporate FCPA violations.

At issue in the BellSouth case were weaknesses in the internal control systems of two Latin American subsidiaries. The SEC faulted these systems for allowing payments in Nicaragua to the wife of a legislator (a practice that violates the anti-bribery provisions of FCPA). In Venezuela, control weaknesses were blamed for obscuring the identities of the ultimate recipients of payments based on fictitious invoices.

In the BellSouth case, the SEC is sending a clear message about the importance of effective corporate codes of conduct and compliance programs to companies with overseas operations. In reaching the settlement, which included a civil penalty of $150,000, BellSouth says the SEC acknowledged the company’s remedial actions and enhanced compliance program.

Prompt remedial actions and effective compliance programs also played a role in reaching settlements on the other recent enforcement proceedings involving alleged FCPA violations, including the SEC’s complaints against IBM Corporation and Chiquita Brands International.

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.