A San Jose, California, communications technology company agreed to settle SEC charges for violating the Foreign Corrupt Practices Act ("FCPA"). In addition, the DOJ declined to pursue criminal prosecution of the company in connection with the same conduct.
According to the SEC Order, between 2006 and 2014, employees of Polycom Inc. (as of July 2018, a wholly owned subsidiary of Plantronics) made improper payments to government officials in China. The SEC alleged that a Polycom Vice President at the company's China subsidiary, along with other senior managers, provided discounts to distributors and resellers, which were then used to bribe Chinese government officials. As detailed, to avoid detection, the subsidiary's employees and managers entered the improper payments in a deal-tracking and email system that was "outside of Polycom's company approved systems." According to the SEC's Administrative Summary, "Polycom failed to maintain a sufficient system of internal accounting controls and lacked an effective anti-corruption compliance program with regard to its Chinese sales operations."
Polycom agreed to disgorge approximately $31 million in profits allegedly derived from the Chinese subsidiary's improper payments, with approximately $10.67 million to be paid to the SEC, and approximately $10.15 million to be paid to each of the U.S. Treasury Department and U.S. Postal Inspection Service Consumer Fraud Fund. Polycom also agreed to pay a $3.8 million civil penalty and approximately $1.83 million in prejudgment interest to the SEC.
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