The Private Equity Trap: How Global Anticorruption Can Ensnare the Unwary Private Equity Professional

Private-equity professionals beware: the "wave" of anticorruption prosecutions has not crested, as many predicted, but swelled higher. Investors face a host of potent anticorruption laws that agencies now assert with intensifying vigor and frequency. Under the Foreign Corrupt Practices Act, the DOJ and SEC have prosecuted individuals who were concededly unaware of actual bribery, yet failed to disabuse themselves of any suspicions. The Dodd-Frank Act expands whistleblowing rewards and control-person liability. The U.K. Bribery Act of July 2011 is even more severe. And since 2013 aggressive Chinese enforcers have even detained U.S. executives. The experienced attorneyauthors here survey the sources of liability using statutes, precedents, news stories, agency releases, and academic articles. With cautionary illustrations drawn from the surprising conviction of investor Frederic Bourke (whose guilt even the judge questioned), the authors offer their recommendations to avoid the fearsome, ensnaring anti-corruption laws.