Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Administrative Proceeding
Docket or Case Number:
3-14364
Name of Prosecuting Attorneys:
Charles E. Cain, SEC Headquarters
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Voluntary disclosure
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Rockwell Automation, Inc. ("Rockwell") was a global company engaged in the design and manufacture of industrial automation products and services. The company was incorporated in Delaware with its principal executive offices in Milwaukee, Wisconsin. Rockwell's common stock was registered with the SEC and was listed on the New York Stock Exchange.
From 2003 to 2006, certain employees of Rockwell Automation Power Systems (Shanghai) Ltd. ("RAPS-China"), which was divested by Rockwell in January, 2007, paid approximately $615,000 to Design Institutes, which were typically state-owned enterprises that provided design engineering and technical integration services that can influence contract awards by end-user state-owned customers. The payments were made through third-party intermediaries at the request of Design Institute employees and at the direction of RAPS-China’s Marketing and Sales Director. RAPS-China’s Marketing and Sales Director intended that these funds be paid directly to the Design Institute employees, with the expectation that they would influence the ultimate state-owned customers to purchase RAPS products. While the Design Institutes did provide some bona fide engineering and other services in connection with RAPS-China’s end-user contracts, RAPS-China could not substantiate the specific services rendered or the value of those services. Also during the same period, employees of RAPS-China paid approximately $450,000 to fund sightseeing and other non-business trips for employees of Design Institutes and other state-owned companies. Rockwell realized approximately $1.7 million in net profits on sales contracts with end-user Chinese government-owned companies that were associated with payments to the Design Institutes.
On May 3, 2011, the SEC instituted cease and desist proceedings against Rockwell. The SEC instituted the proceedings based on a settlement offer from Rockwell, which the SEC accepted. Without admitting or denying the findings in the cease and desist order, Rockwell agreed to cease and desist violating the books & records and internal controls provisions of the FCPA. The company also agreed to pay disgorgement of $1,771,000, prejudgment interest of $590,091 and a civil money penalty of $400,000. The SEC noted Rockwell's coorperation in limiting the monetary penalty to only $400,000.
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