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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Investigation Costs Keep Climbing

Peter Henning’s Dealbook column last week talked about the costs of FCPA investigations.

Avon Products, he said, spent $93.3 million last year on an internal investigation of possible FCPA violations, $95 million in 2010, and $59 million in 2009.

Henning, left, a former federal prosecutor and now a professor at Wayne State University Law School, said Avon’s case isn’t over. ‘[T]he fact that there was only a minuscule decline in the legal costs last year,’ he said, ‘indicates that the investigation has uncovered a wider range of possible violations.’

News Corp’s internal investigation of telephone hacking and corrupt payments to British officials has so far cost $104 million (all incurred in last six months of 2011).

Siemens A.G. reported legal and professional fees of ‘more than $1 billion for a global inquiry into payment of bribes to foreign officials to win business,’ Henning said. Siemens paid $800 million in 2008 to settle FCPA charges with the DOJ and SEC, and another $800 million more to German authorities.

Henning said investors should be concerned about legal fees for internal investigations. ‘Cases can take years to resolve,’ he said, ‘and companies have little control over legal fees they have contractually committed themselves to pay on behalf of individual employees.’

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