Court documents accuse a Maxwell subsidiary of paying an agent more than $2.5 million to land contracts between 2002 and 2009.
Maxwell Technologies has agreed to pay a total of more than $14 million to federal watchdogs for its alleged violation of the Foreign Corrupt Practices Act.
The SEC alleges one of the company’s subsidiaries bribed Chinese government officials in an effort to secure sales of its products in several of its Chinese state-owned entities.
According a complaint brought by the SEC, Maxwell’s Swiss subsidiary, Maxwell SA, recruited a Chinese agent to sell its products in China. Then, in July 2002 and May 2009, Maxwell allegedly paid more than $2.5 million to the Chinese agent to secure contracts with local customers.
The subsidiary received contracts that generated $15 million in revenues and $5.6 million in profits to the company.
The Justice Department (DoJ) charged the California-based Maxwell with violating the FCPA antibribery provision and on its books-and-record provision.
'This enforcement action shows that corruption can constitute disclosure violations as well as violations of other securities laws,' says Cheryl Scarboro, chief of the SEC's FCPA Unit.
SEC and DoJ actions like the ones brought against Maxwell and Innospec earlier this month, are likely to get companies to act against internal bribery schemes, said Rick Cassin, a lawyer and an FCPA expert. Cassin predicts that more crackdowns by the SEC will occur as the year progresses.
'More companies are likely to self-report potential violations as part of their remedial actions under their compliance programs and FCPA Whistleblowers are already active,’ he says. 'The FCPA is still very high on the SEC priority list, so the agency will devote its resources to the cases.'
