An IT outsourcing firm agreed to pay over $25 Million in disgorgement, interest and penalties for violating the Foreign Corrupt Practices Act by paying bribes to Indian government officials to build facilities there. The SEC and the Department of Justice have also charged the firm’s President and Chief Legal Officer with approving and facilitating the transactions. According to the SEC, Indian officials demanded bribes to grant construction permits, and the firm approved and arranged such payments through a third-party contractor. The SEC alleges that the firm hid the bribes by falsifying construction change orders. The SEC charged the company on the legal theory of respondeat superior whereby the company is responsible for the actions of its senior executives.
Firms doing business outside the United States must create compliance infrastructure to prevent employees at any level from paying bribes. Violations of the FCPA carry severe civil and criminal penalties.