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On December 1, 2016, Parker Hannifin Corporation and CLARCOR Inc. announced that the companies have entered into a definitive agreement under which Parker will acquire CLARCOR for approximately $4.3 billion in cash, including the assumption of net debt. The transaction has been unanimously approved by the board of directors of each company. Upon closing of the transaction, expected to be completed by or during the first quarter of Parker’s fiscal year 2018, CLARCOR will be combined with Parker’s Filtration Group to form a leading and diverse global filtration business. Bass, Berry & Sims has served CLARCOR as primary corporate and securities counsel for 10 years and served as lead counsel on this transaction. Read more here.

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Securities Law Exchange BlogSecurities Law Exchange blog offers insight on the latest legal and regulatory developments affecting publicly traded companies. It focuses on a wide variety of topics including regulation and reporting updates, public company advisory topics, IPO readiness and exchange updates including IPO announcements, M&A trends and deal news.

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GovCon Blog: When Intern Season Gets Hot: the Perils of Improper Hiring Under the FCPA

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August 25, 2015

On August 18, the Bank of New York Mellon Corporation (BNY Mellon) agreed to pay $14.8 million to settle allegations that it had violated the U.S. Foreign Corrupt Practices Act (FCPA) by providing internships to family members of foreign officials affiliated with a Middle Eastern sovereign wealth fund the bank sought to manage.

According to the settlement order, which is available here, BNY Mellon provided the internships at the request of the foreign officials, even though the prospective interns failed to meet the bank's hiring criteria and were less than exemplary employees. In so doing, the bank violated the FCPA's anti-bribery provisions and demonstrated that it lacked internal controls sufficient to ensure its hiring process would not be used to improperly obtain or retain business.

This settlement highlights two essential FCPA-compliance points.

First, a payment under the FCPA can include things other than the typical cash, gifts, travel or entertainment expenses that often get companies in trouble. A prohibited payment can be anything of value, including – as in BNY Mellon's case – relaxation of typical company standards for the benefit a foreign official.

Second, a company's compliance policy should specifically address hiring anyone, or taking any particular action, that is a benefit to a customer – particularly a customer who happens to be a foreign official. A company that elects not to outright prohibit hiring candidates recommended by a customer should, at the very least, implement strict controls to ensure that such candidates are subject to the same evaluation criteria as all other applicants. And hiring decisions about such candidates should require specific management approval; the decision should not be left to the discretion of sales staff or relationship managers involved with the customer.

The BNY Mellon case is a useful reminder that companies should reevaluate the myriad opportunities for personnel to provide improper benefits in violation of the FCPA. An effective compliance policy must reflect and impose controls to protect against those risks.

Read more about government contracts on www.BassBerryGovCon.com.


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