FCPA Enforcement In A Sarbanes-Oxley World

A prime example of this increased interest in prosecution is the SEC's 2004 case against Schering-Plough Corporation. In Schering-Plough, the SEC charged the company with violating the books and records and internal control provisions of the FCPA in connection with payments its Polish subsidiary made to a legitimate charity affiliated with a Polish governmental official. The SEC found that the company made payments totaling $76,000 in an attempt to influence the official to use his authority as the director of a Polish health authority to promote the purchase of Schering-Plough's pharmaceutical products. Because Schering-Plough failed to properly record the payments, the SEC charged the company with violating the books and records provisions of the FCPA. Further, because the company's system of internal controls failed to detect or prevent the improper payments, the SEC found that the company violated the internal control provisions of the FCPA as well. In settling the case, Schering-Plough was ordered to cease and desist from committing or causing any violation, and any future violation of the books and records and internal control provisions of the FCPA. Further, the SEC required the company to retain an independent consultant to evaluate the company's internal controls and issue a report to the Government. Finally, the company was forced to pay a $500,000 fine.