The Foreign Corrupt Practices Act in Merger and Acquisition Transactions : Successor Liability and Its Consequences

This Article traces the development of successor liability under the Foreign Corrupt Practices Act (“FCPA”) by outlining the transition from corporate self-regulation to a harsher brand of private enforcement that poses significant challenges for transnational mergers and acquisitions (“M&A”). By holding innocent acquirers liable for the pre-acquisition FCPA violations of target entities, the U.S. Department of Justice and the Securities and Exchange Commission have created a regulatory environment that is dangerous to efficient corporate transactions. Successor liability for FCPA violations also risks undercutting public and private responses to corporate corruption.Firm transactional due diligence guidelines coupled with a regulatory safe harbor will restore efficiency to the cross-border M&A market while enhancing FCPA compliance