Polycom, Inc., headquartered in San Jose, California, sold voice and video communications products and services. From 1996 until 2016, Polycom’s common stock was registered with the SEC and traded on the NASDAQ. On September 27, 2016, a private equity firm acquired Polycom, at which pount the company's shares ceased to trade publicly. On July 2, 2018, Plantronics, Inc. acquired Polycom from the private equity firm, and Polycom became a wholly-owned subsidiary of Plantronics.
Polycom Communications Solutions (Beijing) Co., Ltd. (China) (“ Polycom China”) was a wholly-owned subsidiary of Polycom organized in China that sold Polycom’s products and services in the Chinese market.
According to the documents filed in the related SEC enforcement action, from 2006 through 2014, Polycom’s Vice President of China at Polycom China, along with other senior managers, provided significant discounts to Polycom’s distributors with the intention that the distributors would use the discounts to make payments to officials at Chinese government agencies and state-owned enterprises in order to sell Polycom's products. The payments were recorded in a parallel deal-tracking and email system located in China, outside of Polycom’s company-approved systems. In its declination letter to the company, the DOJ noted that Polycom earned profits of $30,978,000 form the illegaly obtained contracts in China.
On December 20, 2108, the DOJ issued a formal declination letter to Polycom pursuant to the agency's Corporate Enforcement Policy. Under the terms of the declination, Polycom would not be prosecuted but was required to disgorge $30,978,000. The company would pay $10,672,926 of the disgorgement to the SEC in the related enforcement action and $10,152,537 each to both the DOJ and the U.S. Postal Inspection Service Consumer Fraud Fund.
In a related settled administrative proceeding initiated on December 26, 2018, the SEC ordered Polycom to cease and desist violations of the books and records and internal controls provisions of the FCPA. In addition the SEC ordered Polycom to pay disgorgement of $10,672,926 plus prejudgment interest of $1,833,410 and a civil fine of $3,800,000. In determining to accept the settlement and the amount of fines paid, the SEC noted Polycom's voluntary disclosure of the misconduct as well as the company's cooperation in the investigation and the remedial measures taken.
