Buyer Beware: The DOJ and SEC are Serious about FCPA Successor Liability
Companies looking at acquisitions need to try to eliminate the risk of successor liability for the acquired company’s policies, practices, and missteps. Not only can successor liability diminish the value of the acquisition, but it can also expose the acquiring company to significant criminal liability, fines, negative media attention, and reputational damage. The SEC recently clamped down on an acquiring company for its failure to timely and comprehensively address matters discovered in its pre-acquisition due diligence and several post-acquisition audits.
This Webinar will acquaint attendees with the circumstances and holdings of In the Matter of Kinross Gold Corporation, SEC Release No. 82946 (March 26, 2018). The Kinross case demonstrates that pre-acquisition diligence is not enough. Companies must take meaningful efforts to affect necessary remediations, implement strong compliance programs, and closely monitor the real-world results of those programs. While the U.S. government may not require perfection on Day One post-acquisition, any company that permits a notable delay creates significant risk for itself. Although the Kinross case was a civil SEC settlement, there is every reason to believe that the DOJ would, if the facts were available, take a similar approach toward criminal enforcement.
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