IRAC Brief: Stryker Corporation and the Securities and Exchange Commission
Legal risks associated with domestic and international business are a challenge for today’s business managers. A company must possess strong internal controls to prevent deceptive bookkeeping and corrupt business practices as part of their overseas operations. Stryker Corporation experienced this firsthand as part of their international business practices, recently challenged by the Securities and Exchange Commission (SEC). In the following reflection, Team A applies the IRAC method of case analysis to examine Stryker’s handling of violations related to the Foreign Corrupt Practices Act (FCPA). The authors will address the four necessary components of the IRAC acronym: issue, rule, analysis, and conclusion. Careful analysis of IRAC findings will aid Team A’s understanding of the importance of internal controls in managing legal risk in overseas business. Issue
In the case of Stryker Corporation vs. the Securities and Exchange Commission, Stryker made approximately $2.2 million in unlawful payments to several government employees, including public health care professionals in Mexico, Poland, Romania, Argentina, and Greece. Stryker described these expenses in the company’s books and records as being valid expenses; however the fact remained that the payments made for things such as travel, donations or commissions were improperly made by the company attempting to retain business relations ("SEC.gov | SEC Charges Stryker Corporation With FCPA Violations," 2013., p. 1 ). The company made approximately $7.5 million in profits associated with these acts. Stryker was in violation of section 13 of the Securities Exchange Act of 1934, in which failure of the maintaining a checks and balances system of internal accounting controls in violation of Section 13 of the Exchange Act ("SEC.gov | SEC Charges Stryker Corporation With FCPA Violations," 2013., p.1 ). Rule
The Foreign Corrupt...
References: SEC.gov. SEC Charges Stryker Corporation With FCPA Violations. (2013).
Retrieved from http ://www.sec.gov /News/PressRelease/Detail/PressRelease/1370540044262#.UpKcDuKUekw
Sherry, A. (2013, October 24). Sec: Stryker settles fcpa charges for $13.3 million. Securities Regulation Daily, Retrieved from http://www.dailyreportingsuite.com/securities/news/sec_stryker_settles_fcpa_charges_for_13_3_million
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