In the Fall 2010 issue of the Journal of Private Equity, Joan McPhee, Kirsten Mayer and Amanda Raad write that the increasing global appetite for anticorruption enforcement, combined with ever-lower thresholds for liability, signifies new frontiers of potential exposure.
With private equity firms invested in high-risk industries around the world, often in countries with different business customs and practices, the upstream risk of inadvertently incurring civil as well as criminal liability from the actions of portfolio companies abroad can be substantial. Firm personnel who serve as officers or directors of portfolio companies may increasingly face personal liability. A clear understanding of emerging risks is essential.
