Government Launches FCPA Inquiry into Investments by Sovereign Wealth Funds in U.S. Banks and Private Equity Firms

In recent years, the U.S. Department of Justice ("DOJ") and the Securities and Exchange Commission ("SEC") have stepped up their enforcement of the anti-bribery provisions of the U.S. Foreign Corrupt Practices Act of 1977 ("FCPA"), imposing record criminal fines and civil penalties, such as the $800 million fine in 2008 against Siemens, the German conglomerate. The DOJ and SEC have declared FCPA enforcement a high priority, bulked up their enforcement teams, and shown a readiness to apply the statute in increasingly expansive and creative ways. Earlier this year, in a development that should be of particular interest to the private investment fund community, the Wall Street Journal reported that the SEC is investigating whether banks and private equity firms may have violated the FCPA in their dealings with sovereign wealth funds ("SWFs").