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The U.S. government’s aggressive enforcement of the Foreign Corrupt Practices Act shows no signs of slowing down, and multinational companies continue to face enormous regulatory scrutiny for their overseas business practices. The recent prosecution and guilty plea of a former Morgan Stanley executive, however, is a sign of hope for companies that invest in compliance and do the right thing when problems are found. Although former executive Garth Peterson engaged in an elaborate conspiracy to bribe a Chinese official to win business for Morgan Stanley (and to line his own pockets), the firm will face no penalties. Why? Morgan Stanley was able to show it had a pre-existing, effective, and evolving compliance program and persuaded the government that Peterson acted on his own and against the company’s established policies. In short, Morgan Stanley’s compliance program shielded it from an enforcement action. Although there is no doubt that the firm felt the financial and reputational pain of Peterson’s actions, this case is an unusual success story and an example of a well-managed crisis. The Morgan Stanley story offers valuable insights to the commonly asked question of “What is enough when it comes to compliance?” It also shows that no matter how good a global company’s compliance program, no company is immune from rogue employees. The lesson here is that not every crisis needs be front-page news or a scandal that brings a business to the brink of disaster.

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