Recent Cases Expand Aggressive Enforcement Theory of Parent Company Liability Under the FCPA

Alcoa Inc.'s recent Foreign Corrupt Practices Act (FCPA) settlement, totaling US$384 million in penalties, forfeitures, and disgorgement, is the fifth largest FCPA case to date. Following recent actions against parent companies Ralph Lauren Corporation and Oracle Corporation based on conduct by their subsidiaries, the Alcoa case reflects another expansive theory under which the SEC is holding responsible parent corporations for the conduct of their subsidiaries.

This trend, which shows no signs of abating, poses significant implications and potential liability for parent companies in the future.