Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Federal Court Proceeding
Docket or Case Number:
06-cv-02942
Court:
S.D. New York
Name of Prosecuting Attorneys:
Scott W. Friestad, SEC Headquarters
Arthur S. Lowry, SEC Headquarters
James T. Coffman, SEC Headquarters
David Frohlich, SEC Headquarters
Stephen E. Jones, SEC Headquarters
Grayson D. Stratton, SEC Headquarters
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Unknown
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Tyco International Ltd. ("Tyco") was a Bermuda corporation with its headquarters in Bermuda. Tyco was a diversified manufacturing and service company involved in fire protection and safety systems, electronic security services, electrical and electronic components, medical products, and engineered products and services. Tyco's common stock was registered with the SEC and traded on the New York Stock Exchange.
In 1998, Tyco acquired Multiservice Engenharia Ltda., a Brazilian engineering company, and renamed it Earth Tech Brasil Ltda. ("Earth Tech Brazil"). Tyco acquired Earth Tech Brazil notwithstanding that its due diligence for the acquisition revealed that illicit payments to government officials were common in Brazil and were portrayed as necessary in the industries in which Earth Tech Brazil conducted business.
In 1999, Tyco acquired Dong Bang Industrial Co. Ltd. ("Dong Bang"), a South Korean fire protection services firm.
From 1999 through 2002, employees at Earth Tech Brazil repeatedly paid money to various Brazilian officials for the purpose of obtaining business, primarily in the construction and operation of municipal water and wastewater treatment systems, and certain executives at Dong Bang made cash payments and provided entertainment to various South Korean officials to assist Dong Bang in obtaining contracting work on various government-controlled projects.
On April 13, 2006, the SEC filed a five count Complaint in the Southern District of New York against Tyco alleging, among other related securities violations, direct violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. The filing of the Complaint had been agreed to by Tyco in a Consent Agreement dated October 3, 2005. Under the terms of the Consent Agreement and without admitting or denying the allegations in the Complaint, Tyco agreed to be permanently enjoined from future violations of the FCPA and the various Securities Act violations alleged in the Complaint. The Company also agreed to disgorgement of $1 and to a civil monetary penalty of $50 million. While the majority of the $50 million penalty presumably stems from the non-FCPA offenses, the Final Judgment, dated April 27, 2006, does not detail the amounts attributable to each violation.
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