SEC Charges Control Person Liability in Settled FCPA Action

SEC Charges Control Person Liability in Settled FCPA Action | Compliance Week

In a new twist on an old statute, the Securities and Exchange Commission brought its first Foreign Corrupt Practices Act action charging control person liability under the Exchange Act.

In a July 31 settled enforcement action, the SEC charged a parent corporation, Nature’s Sunshine Products, with violating the FCPA’s anti-bribery, books and records, and internal controls provisions and other securities law violations based on payments allegedly paid by its Brazilian subsidiary to customs brokers to facilitate the importation of unregistered products.

Notably, the agency also charged current NSP executive Douglas Faggioli and former NSP executive Craig Huff with violating the FCPA’s books and records and internal controls provisions based on their position as “control persons,” even though the SEC didn’t allege that the executives had personal knowledge of the payments (See the SEC’s complaint.)

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