Westinghouse Air Brake Technologies Corporation ("Wabtec"), incorporated in Delaware and headquartered in western Pennsylvania, manufactures brake subsystems and related products for locomotives, freight cars and passenger vehicles, among other things. Wabtec employs approximately 5,000 people in 40 manufacturing plants, service centers, and sales offices located in the United States, Canada, Mexico, Europe, Asia, Australia and South America. Wabtec's stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange. Wabtec files reports with the Commission pursuant to Section 13 of the Exchange Act. Wabtec is an "issuer" pursuant to the FCPA.
Pioneer Friction Limited ("Pioneer"), incorporated and headquartered in India, manufactures low and high friction brake blocks for rail operations. Pioneer is a fourth tier, wholly-owned subsidiary of Wabtec. Pioneer's financial results are reported on a consolidated basis as part of Wabtec's consolidated financial statements.
From at least 2001 through 2005, Wabtec, through its Indian subsidiary Pioneer, made unlawful payments to employees of the Indian government in connection with Pioneer's efforts to obtain and retain business from the Indian national railway system. During this time period, Pioneer made over $137,400 in improper cash payments to employees of the Indian government in order to have its competitive bids for government business granted or considered. None of these payments were accurately reflected on Wabtec's books and records and Wabtec failed to prevent or detect these payments. In 2005, the IRB awarded Pioneer the primary contract and other related contracts. As a result of being awarded the contracts in 2005, Pioneer realized profits of $259,000.
On February 14, 2008, the SEC brought a three count civil action against Wabtec alleging violations of the Anti-Bribery, Books & Records, and Internal Controls provisions of the FCPA. Judgment was entered on February 15, 2008, pursuant to an earlier Consent Agreement between the Wabtec and the SEC. Under the agreement, Wabtec agreed to pay a civil fine of $87,000.
In a separate proceeding, Wabtec consented to the entry of a cease and desist order from the SEC detailing the same allegations and requiring disgorgement of $259,000 and pre-judgement interest of $29,351 and the appointment of a compliance consultant for a 60-day review. In a sparate proceeding, Wabtec and the DOJ entered into a Non Prosecution Agreement. Under the Agreement, Wabtec agreed to pay a fine of $300,000 and to implement and enhance its internal controls, bookkeeping, and compliance programs.
