Software Company Charged with FCPA Violations

An SEC investigation found that a software company violated the recordkeeping and internal controls provisions of the Foreign Corrupt Practices Act of 1977 ("FCPA").

Deficient internal controls allowed one of the company's employees to sell software to a former local partner at prices that were discounted sufficiently to allow the employee and the local partner to pay $145,000 in bribes to one senior Panamanian government official and to offer bribes to two others in exchange for sales contracts. Through these bribes, the employee secured government sales contracts of approximately $3.7 million for the company and also obtained kickbacks.

These excessive discounts were recorded falsely as legitimate and were consolidated into the company's financial statements.

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