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Enforcement Action Dataset

 

Initiation Date:    09/27/2019  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Administrative Proceeding

Docket or Case Number:    3-19543

Name of Prosecuting Attorneys:   

  • Ansu N. Banerjee, SEC Headquarters
  • Catherine W. Brilliant, SEC Los Angeles Regional Office
  • Mark Yost, SEC Headquarters

US Assisting Agencies:    Unknown

Foreign Enforcement Action/Investigation:    Unknown

Foreign Assistance:   

  • British Columbia Securities Commission (CA)

Origin of the Proceeding:    Unknown

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Westport Fuel Systems, Inc. was a Canadian corporation headquartered in Vancouver that designed and manufactured clean fuel systems. Westport’s common stock was registered with the SEC, and it also listed its securities on the Toronto Stock Exchange. Among Westport’s subsidiaries was a Hong Kong entity that owned shares in Westport’s Chinese joint venture, which prior to the misconduct was jointly owned by the subsidiary, a Chinese state-owned entity, and a privately held Hong Kong conglomerate.

Nancy Gougarty joined Westport in July 2013 as the company's Chief Operating Officer. In July 2016, she became the Chief Executive Officer and a member of Westport’s board of directors until she retired in January 2019.

According to the documents in this case, from 2013 through 2016, Westport, through Gougarty and others, engaged in a scheme to bribe a Chinese government official to obtain business and a cash dividend payment from Westport’s Chinese joint venture. JV’s largest shareholder during the relevant period was the Chinese state-owned entity. The Chinese government official held a senior position at the state-owned entity. At the request of the state-owned entity, Westport transfered a portion of Westport’s joint venture shares at a low valuation to a Chinese private equity fund in which the Chinese government official held a financial interest. In exchange, the Chinese government official would use his influence to cause the joint venture to authorize an increased dividend payment of $3.5 million to Westport and to execute a supply agreement between the joint venture and Westport.

In a settled administrative proceeding initiated on September 27, 2019, the SEC ordered Westport and Gougarty to cease and desist violations of the anti-bribery, books and records, and internal controls provisions of the FCPA. Under the terms of the agreement, Westport agreed to pay disgorgement of $2,350,000, prejudgment interest of $196,000, and a civil penalty of $1,500,000, for a total payment of $4,046,000, and Gougarty agreed to pay a civil penalty of $120,000. Westport also agreed to self-report to the SEC on the status of its enhanced anti-corruption compliance policies and procedures for a term of two years. The SEC noted Westport's cooperation and remediation in this case.

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