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The Securities and Exchange Commission announced Feb. 1 a settlement in which a company has agreed to pay disgorgement of $3.7 million in sales profits, plus prejudgment interest of nearly $190,000, to settle charges that it violated the Foreign Corrupt Practices Act when procuring business in Panama.
An SEC cease-and-desist order asserts that the violations occurred due to deficient internal controls that allowed a former executive to excessively discount the price of the company’s product and create a slush fund used to pay $145,000 in bribes to one senior Panamanian government official and offer bribes to two others. The former executive concealed his scheme from others, circumvented the company’s internal controls and justified the excessive discounts by falsifying internal approval forms. The SEC also charged the company with failing to devise and maintain an adequate system of internal accounting controls sufficient to provide reasonable assurances that improper payments to government officials did not occur.
Without admitting or denying these charges, the company consented to the cease-and-desist order and the disgorgement amount, which the SEC states reflects the company’s cooperation and remedial measures.