Despite admitting that it made illicit payments to Argentinian customs officials over four years, the Ralph Lauren Corporation raised eyebrows for another reason. In April 2013, it became the first company to receive a “Non-Prosecution Agreement” from the US Securities and Exchange Commission related to violations of the Foreign Corrupt Practices Act. The SEC extended this concession under its “Enforcement Cooperation Initiative,” under which companies are encouraged to come forward and “self-report” their violations.
The Ralph Lauren settlement, which some consider an important guide for handling an FCPA case, provides key lessons on avoiding criminal charges and walking away virtually without scars, except for unwelcome headlines that soon dissipate.
In this ACFCS Financial Crimecast, attorney Andrew George, of Baker Botts LLP, in Washington, DC, explains the difference between a Non-Prosecution Agreement and a “Deferred Prosecution Agreement,” the way the SEC’s Enforcement Cooperation Initiative works, the measures the Lauren company took to mitigate its wrongdoing, and the key lessons for companies looking to bolster their odds of avoiding prosecution by the US government.