It turns out the Justice Department and SEC had it right all along.

As the U.S. Supreme Court's 8-0 Salman v. United States decision shows, "anything of value" really does mean anything of value. While this judicial decision did not come in a FCPA enforcement action, Salman, an insider trading case, shows that if an insider provides a tip to another, it is the same effect as if the insider had used the information. Justice Alito writing for the majority stated, “It is obvious that Maher [the inside tipper] would personally benefit in the situation.  But Maher effectively achieved the same result by disclosing the information to Michael, and allowing him to trade on it.” So the simple act of disclosing the insider information can lead to a criminal conviction.

One of the ongoing critiques The Man From FCPA has heard over the years is the dearth of case law interpretation of the law. This lack of judicial scrutiny has led some to opine the Justice Department and SEC have taken expansive views of the law, stretching the boundaries of the FCPA in enforcement actions. One recent example was in the JP Morgan Sons and Daughters enforcement action where some have argued that hiring a family member is not a benefit to a foreign official.

This argument should have been put to rest by the facts of the enforcement action, where it was revealed JP Morgan had program designed to target for hiring family members of Chinese officials who could send business the company’s way. This was an intentional scheme, directly in violation of the FCPA and the company’s own internal policy on hiring. Company employees, unfortunately even legal and compliance personnel, went out of their way to disguise the true nature of the hiring program.

Yet even with these egregious facts, some commentators continued to argue the hiring of family members was not a benefit to the government official. The U.S. Supreme Court has now made that answer clear: Anything of value really does mean anything of value. 

Topics