An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Historic SEC FCPA Non-Prosecution Agreement Involving Ralph Lauren Corp
April 23, 2013On April 22, 2013, the Securities and Exchange Commission ("SEC") announced that he had decided not to charge Ralph Lauren Corporation with violations of the Foreign Corrupt Practices Act ("FCPA"). This Non-Prosecution Agreement ("NPA") entailed the SEC's recognition that Ralph Lauren Corporation had saved the SEC substantial time and resources that would ordinarily have been consumed in an investigation. Pursuant to the NPA, Ralph Lauren Corporation will disgorge more than $700,000 in illicit profits and interest obtained in connection with bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009.
The alleged misconduct was uncovered in a Ralph Lauren Corporation internal review undertaken by the
company and promptly reported to the SEC. In opting the NPA route, the SEC noted the company's:
- prompt reporting of the violations on its own initiative,
- providing extensive and meaningful information it provided, and
- extensive, thorough, and real-time cooperation with the SEC's investigation.
Among the specific manifestations of the company's
cooperation cited by the SEC were
- Reporting preliminary findings of its internal investigation to the staff within two weeks of discovering the illegal payments and gifts.
- Voluntarily and expeditiously producing documents.
- Providing English language translations of documents to the staff.
- Summarizing witness interviews that the company's investigators conducted overseas.
- Making overseas witnesses available for staff interviews and bringing witnesses to the U.S.
The Ralph Lauren Corporation NPA is the first that the SEC
has entered involving FCPA misconduct. In parallel criminal proceedings, the
Justice Department entered into an NPA with Ralph Lauren Corporation in which
the company will pay an $882,000 penalty.
Also, READ:
- UPDATE : Oshkosh! Omigosh!! Carter's Executives Named In Federal Fraud Indictments
- READ: Carter's NPA
- UBS Pays $160 Million Restitution in Antitrust Muni Settlement
According to the agreement, the manager of RLC's subsidiary in Argentina bribed customs officials in Argentina over the span of five years to improperly obtain paperwork necessary for goods to clear customs; permit clearance of items without the necessary paperwork and/or the clearance of prohibited items; and on occasion, to avoid inspection entirely. RLC's employee disguised the payments by funneling them through a customs clearance agency, which created fake invoices to justify the improper payments. During these five years, RLC did not have an anti-corruption program and did not provide any anti-corruption training or oversight with respect to its subsidiary in Argentina.