In this episode, I visit with Marc Bohn, Counsel at Miller & Chevalier on the recent 11th circuit opinion limiting the SOL on profit disgorgement claims to 5 years and the IRS tax letter holding payments for profit disgorgement not deductible. We work through a hypothetical which a company might face in a FCPA matter on the issue. We discuss the following scenario:

Hypothetical: Self-Disclosure Considerations: Let’s assume a publicly-listed U.S. company with a global footprint has identified potentially improper payments by a wholly-owned subsidiary in Latin America to a local government official that was provided to secure a lucrative contract. Let’s say the U.S. parent had no involvement in or knowledge of the misconduct, but may have consolidated over $1 million in what seem to be illicit gains into its financial statements. Assuming the myriad of other factors relevant to a self-disclosure decision are equal, how might the various disgorgement-related developments we’ve been discussing impact a decision by the company on (a) whether or not to voluntarily disclose; and (b) how to approach such a self-disclosure?

For more information, see the following articles by Bohn and others at Miller on the issue of profit disgorgement.

  1. Eleventh Circuit Restricts SEC’s Ability to Impose Disgorgement;
  2. Disgorgement: the Devil You Don’t Know
  3. Disgorgement, an overlooked aspect of the Ralph Lauren settlement?