There continues to be the release of significant FCPA news this year despite a report from law firm Miller & Chevalier noting that the number of resolved FCPA enforcement actions in 2015 was at its lowest level since 2006. The report looked at both SEC and DOJ investigations which resulted in penalties. All indications so far are that this was just a short term lull in enforcement rather than the beginning of a long term trend.
PTC Settlement
Yesterday, the news broke about the SEC and DOJ settlement with PTC. Two subsidiaries of PTC in Shanghai and Hong Kong paid more than $1 million to fund trips for employees of state-owned enterprises. The trips were purportedly for training but actually involved mostly recreational activities, according to the SEC. PTC employees of the units in China also gave wine, cell phones, iPods and gift cards improperly to the Chinese officials.
PTC agreed to pay $14.5 million to avoid possible prosecution by the Department of Justice and disgorge nearly $14 million in profits and interest to the SEC.
As part of the settlement, the SEC also issued its first deferred prosecution agreement against an individual. The former employee of a PTC China subsidiary provided significant cooperation and civil charges were deferred for three years as a result. Such an agreement, used before with corporations and areas outside the FCPA, typically will not result in a subsequent enforcement action if the individual was truthful, continues cooperation, and does not engage in any other illegal conduct. The individual agreed to the DPA here without admitting or denying the allegations.
General Cable Corp. Ups Reserve Additional $4 Million
In a separate matter, GCC said in its release of financial information to investors that its investigation continues into payments of possible bribes to employees of public utility companies and/or other state-owned entities in Angola, Thailand, India, China and Egypt. The company increased its reserves for a possible settlement by $4 million to $28 million. The company also disclosed that they may have to disgorge profits based on the transactions at issue of up to $33 million. GCC is a manufacturer of wire and cable based in Kentucky and listed on the New York Stock Exchange.
If you have questions about this information or want to speak to one of our FCPA whistleblower attorneys about reporting bribery of a government official through the SEC whistleblower law, please contact us via our online contact form.