The SEC has accused the Acme Company of fraud in connection with ...

[savannahhooper]

The SEC has accused the Acme Company of fraud in connection with the sale of its securities to American citizens. Although the firm is American-owned, it is located in Switzerland. All of the accounts and business records of the firm are in several Swiss banks. The SEC has been actively pursuing the case, although it has not been able to provide a great deal of hope for those victimized by the fraud. What factors are probably hindering the SEC, and how might this be handled?

Question 2

Oswaldo Enterprises began to do business in a small East African nation. The representatives of Oswaldo bid on government contracts. Although Oswaldo was by far the lowest bidder and offered a superior product, the company was not awarded a contract. Oswaldo officials learned after inquiring that the company would have to give substantial sums of money to high-level government officials in order to receive a contract. Oswaldo officials are considering this as a necessary cost of doing business, but they are concerned about violating U.S. law. Discuss the implications of this under the Foreign Corrupt Practices Act.

[ecox1012]

Answer to Question 1

Secrecy laws (which prohibit the disclosure of business records or the identity of bank customers) and blocking laws (which prohibit the disclosure, copying, inspection, or removal of documents located in the territory of the enacting country in compliance with orders from foreign authorities) probably are to blame. The SEC may take action under the 1977 Treaty of Mutual Assistance in Criminal Matters if the conduct involved constitutes a criminal offense under the laws of both the United States and Switzerland.

Answer to Question 2

Unfortunately, these payments would appear to violate the Foreign Corrupt Practices Act, which prohibits payments to officials to influence business decisions.

[savannahhooper]

Thanks for the timely response, appreciate it

[mjenn52]

TYSM