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Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
Edition 10ISBN: 978-1259179396Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
Edition 10ISBN: 978-1259179396 Exercise 30
Ralph Lauren Sets Example in FCPA Case
What does a company do when an internal audit finds that bribery has occurred? For Ralph Lauren Corporation, it turns itself in. The company discovered that from 2005 to 2009, bribes were paid to customs and government officials in Argentina in the form of cash, dresses, handbags, and perfume to expedite processes of merchandise in the South American country. This misconduct violates the Foreign Corrupt Practices Act (FCPA), which makes it illegal for companies with operations in the United States to bribe foreign officials.
When Ralph Lauren discovered the bribery, it immediately reported the misconduct to the Securities and Exchange Commission (SEC) and worked with government authorities in the investigation. The company agreed to pay $1.6 million to settle investigations. More than $700,000 of this payment covers the amount of the bribes paid to officials.
By turning itself in, Ralph Lauren received applause from several SEC officials, who deemed the company's actions ethical. The clothing retailer was able to resolve charges and sign nonprosecution agreements. This was the first such agreement in history related to the FCPA. This case demonstrates that it pays to comply with the law when misconduct is discovered. Not only can penalties be less severe, but Ralph Lauren's reputation as a company committed to doing the right thing will likely improve. 36
How did Ralph Lauren violate the FCPA?
What does a company do when an internal audit finds that bribery has occurred? For Ralph Lauren Corporation, it turns itself in. The company discovered that from 2005 to 2009, bribes were paid to customs and government officials in Argentina in the form of cash, dresses, handbags, and perfume to expedite processes of merchandise in the South American country. This misconduct violates the Foreign Corrupt Practices Act (FCPA), which makes it illegal for companies with operations in the United States to bribe foreign officials.
When Ralph Lauren discovered the bribery, it immediately reported the misconduct to the Securities and Exchange Commission (SEC) and worked with government authorities in the investigation. The company agreed to pay $1.6 million to settle investigations. More than $700,000 of this payment covers the amount of the bribes paid to officials.
By turning itself in, Ralph Lauren received applause from several SEC officials, who deemed the company's actions ethical. The clothing retailer was able to resolve charges and sign nonprosecution agreements. This was the first such agreement in history related to the FCPA. This case demonstrates that it pays to comply with the law when misconduct is discovered. Not only can penalties be less severe, but Ralph Lauren's reputation as a company committed to doing the right thing will likely improve. 36
How did Ralph Lauren violate the FCPA?
Explanation
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Business 10th Edition by Ferrell,Geoffrey Hirt,Linda Ferrell
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