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Enforcement Action Dataset


Initiation Date:    09/12/2018  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Administrative Proceeding

Docket or Case Number:    3-18745

Name of Prosecuting Attorneys:   

  • M. Shahriar Masud, SEC Headquarters
  • Tracy L. Price, SEC Headquarters
  • Ilana Z. Sultan, SEC Headquarters

US Assisting Agencies:   

  • U.S. Department of Justice
  • U.S. Postal Inspection Service

Foreign Enforcement Action/Investigation:    Unknown

Foreign Assistance:    Unknown

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved

Summary  Information

United Technologies Corporation ("UTC"), a Delaware corporation headquartered in Connecticut, made and sold high-technology products and services to the building systems and aerospace industries globally. UTC's stock was registed with the SEC and traded on the New York Stock Exchange.

Otis Elevator Company (“Otis”) was a wholly-owned subsidiary of UTC that manufactured and maintained elevators, escalators and moving walkways. Otis operated worldwide through a series of affiliated companies and joint ventures. Among those were Otis Russia, which was based in Russia and marketed to that country as well as other former Soviet countries, Otis China, which included two joint ventures majority owned by UTC, and Otis Kuwait, a joint venture majority owned by UTC.

Pratt & Whitney Company, Inc. (“Pratt”) was a subsidiary of UTC that made and serviced aircraft engines and auxiliary power units for commercial and military aircraft. Pratt’s financials are consolidated with those of UTC.

International Aero Engines (“IAE”) was a joint venture, founded in 1983 by five aerospace companies, including Pratt & Whitney. On June 29, 2012, Pratt & Whitney obtained a majority interest in IAE’s shares. IAE’s relevant financials were reported, and its books and records later consolidated, into UTC’s books and records

According to the documents in the case, between 2009 and 2015, UTC engaged in a series of schemes to improperly compensate foreign officials in a variety of countries in order to obtain business for the company. For example, from 2012 to 2014, UTC, through Otis, made unlawful payments to Azerbaijan officials to facilitate the sales of elevator equipment. Otis China also made improper payments in connection with a kickback scheme to sell elevators in China in 2012. From 2009 to 2013, UTC, through IAE, made payments to an agent, despite a significant risk that some of the money would be used to pay a Chinese official to obtain confidential information in order to sell aircraft engines to a Chinese state-owned airline. Finally, from 2009 to 2015, UTC through both Pratt and Otis improperly provided leisure trips and entertainment unconnected from a business purpose to foreign officials in China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia in connection with its business.

In a settled administrative proceeding on September 12, 2018, the SEC issued a cease and desist order against UTC. Under the terms of the settlement, the SEC ordered UTC to cease and desist violations of the anti-bribery, books and records, and internal controls provisions of the FCPA, to pay disgorgement of $9,067,142 plus prejudgment interest $919,392, and to pay a civil penalty of $4 million. The SEC noted UTC's voluntary self-disclosure of the misconduct as well as the company's cooperation and remedial efforts.

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