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Jun 04, 2013

The Ralph Lauren FCPA Case: Are There Any Limits to Parent Corporation Liability?

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Much of the coverage of the recent Foreign Corrupt Practices Act case against Ralph Lauren Corp. (RLC) focused on the fact that both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) awarded it a Non-Prosecution Agreement (NPA) due to its prompt voluntary disclosure and subsequent cooperation. The facts of the case, however, point to the steady entrenchment of a more ominous prosecution theory: an approach that appears to approximate strict criminal and civil liability of parent corporations for their subsidiaries’ corrupt acts. Although this disregard of corporate structures has been hinted at in previous SEC matters—and the theoretical underpinnings discussed in last year’s DOJ/SEC Resource Guide—the RLC case puts both agencies firmly in the camp of this aggressive and unprecedented expansion of corporate liability.

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Authors and Contributors

Philip Urofsky

Partner

Litigation

+1 202 508 8060

+1 202 508 8060

Washington DC