The U.S. Foreign Corrupt Practices Act (“FCPA”) is a critical tool for combatting international corruption, and businesses operating globally must be vigilant about adhering to its strict provisions. A robust anti-bribery and anti-corruption program is one of the most important components of FCPA compliance. However, recent charges filed by the U.S. Securities and Exchange Commission (SEC) in the case of Adani Green Energy Ltd. and Azure Power Global Ltd. provide a powerful reminder of what can happen when a company’s compliance program is insufficient—or, worse, a mere façade.

In this case, the SEC charged three senior executives—Gautam Adani and Sagar Adani of Adani Green, and Cyril Cabanes of Azure Power—over their alleged roles in orchestrating a massive bribery scheme that spanned international borders and involved millions of dollars in illicit payments to Indian government officials. According to the SEC, this scheme was designed to secure favorable treatment for the companies in relation to a lucrative solar energy project awarded by the Indian government. But what stands out in this case is the role the companies’ FCPA compliance programs played in the investigation, particularly the allegations that they misrepresented their anti-bribery efforts to U.S. investors.

The SEC’s complaint highlights a critical point: the executives behind Adani Green and Azure Power did not just engage in bribery—they also took steps to mislead investors about their company’s anti-bribery measures. Adani Green, for instance, raised $175 million from U.S. investors during a September 2021 bond offering, a process that was allegedly underpinned by a fraudulent misrepresentation of the company’s FCPA compliance program. The offering materials contained statements suggesting that Adani Green had a robust anti-bribery program in place and that senior management had not and would not engage in corrupt activities.

In reality, however, actions told a different story. The Adanis’ alleged involvement in the bribery scheme—and the apparent failure of the compliance program to detect or prevent the illicit activity—demonstrates the significant gap between what the company claimed and what actually transpired. This discrepancy between the company’s public statements and internal practices became central to the SEC’s charges of securities fraud. As the SEC’s Acting Director of Enforcement Sanjay Wadhwa alleged, the Adanis “induced U.S. investors to buy Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-

bribery compliance program but also that the company’s senior management had not and would not pay or promise to pay bribes.”

The Adani Green and Azure Power case underscores a stark reality for companies: an ineffective or poorly implemented compliance program can do more than just fail to prevent corruption—it can actively expose the company to heightened legal and reputational risks. The SEC’s enforcement action and the parallel criminal charges filed by the U.S. Attorney’s Office illustrate how a “bad” compliance program—one that is misleading, poorly executed, or entirely absent—becomes a key piece of evidence in a prosecution.

Here are some critical takeaways from this case:

1. Misleading Representations Can Lead to Fraud Charges: If a company claims to have a comprehensive and effective FCPA compliance program but its actions tell a different story, it risks not only FCPA violations but also securities fraud charges. Investors are misled, and regulatory agencies can charge the company with fraud, as the SEC did in this case against Adani Green.

2. Inadequate Oversight Fuels Corruption: A bad compliance program often reflects inadequate oversight at the highest levels of a company. The SEC’s charges against the Adani executives emphasize how weak internal controls, insufficient due diligence, and a lack of effective monitoring can lead to corruption running unchecked. In this case, the failure to adequately monitor and control the company’s activities enabled the alleged bribery to thrive.

3. Bribery Schemes Can’t Be Isolated from Corporate Governance: FCPA compliance isn’t just about having policies in place—it’s about fostering a corporate culture of ethics and accountability. When senior executives are involved in illicit activities, it often points to broader governance failures. The Adani Green case highlights the critical role that senior leadership plays in ensuring that compliance programs are both effective and genuinely adhered to, rather than treated as a formality.

4. Regulatory Bodies Will Hold Individuals Accountable: The SEC’s action also sends a clear message that individual executives can—and will—be held accountable for failing to prevent corruption, even if they are at the helm of a company with an “official” anti-bribery program in place. The SEC’s charges against Gautam and Sagar Adani, as well as Cyril Cabanes, demonstrate that senior officers who are complicit in violations can face serious legal consequences, including civil penalties, officer and director bars, and even criminal prosecution. 

The Adani Green and Azure Power case serves as a cautionary tale for companies looking to mitigate the risks of FCPA violations. Here are some steps businesses can take to avoid the pitfalls of a “bad” compliance program:

1. Conduct Regular and Thorough Risk Assessments: Compliance programs should be tailored to the specific risks of the company’s operations. Regular risk assessments will help identify areas where bribery and corruption may be more likely and where compliance efforts need to be strengthened.

2. Ensure Robust Training and Awareness: Employees at all levels of the organization need to be trained in FCPA compliance and bribery prevention. This training must be updated regularly to reflect changes in the law and the company’s business practices.

3. Implement Strong Internal Controls and Monitoring: A good compliance program includes regular monitoring and auditing to detect potential violations before they escalate. This includes due diligence on third parties, financial controls, and a system for reporting potential violations.

4. Promote a Culture of Compliance from the Top Down: Senior leadership must set the tone for the entire company by prioritizing ethics and integrity. Compliance is not just the job of the legal or compliance department—it must be embedded into the company’s culture at every level.

5. Be Transparent with Investors and Regulators: Companies should never overstate the strength of their compliance programs. Transparency is key. If a company is making significant claims about its anti-bribery efforts, those claims must be backed up by real-world actions.

The SEC’s recent enforcement actions against Adani Green and Azure Power illustrate just how devastating the consequences can be when a company’s FCPA compliance program is weak, misleading, or non-existent. A bad compliance program not only fails to prevent corruption—it can also expose the company to heightened legal risks and reputational damage.

At Davillier Law Group, we have extensive experience helping businesses develop and maintain FCPA compliance programs that are not only legally sound but also effective in preventing violations. If you’re concerned that your compliance program may fall short or if you are facing scrutiny from regulators, we can help. Contact us today to schedule a consultation and ensure that your company is not only in compliance but protected from future legal risks.