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Enforcement Action Dataset


Initiation Date:    05/11/2023  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Administrative Proceeding

Docket or Case Number:    3-21411

Name of Prosecuting Attorneys:   

  • Christine E. Neal, SEC Headquarters
  • Michael K. Catoe, SEC Headquarters
  • Paul W. Sharratt, SEC Headquarters
  • Sonali Singh, 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  Information

Koninklijke Philips N.V. ("Philips") was a Dutch multinational conglomerate headquartered in Amsterdam with approximately 79,000 employees worldwide. The company’s securities are primarily traded on the Euronext Amsterdam stock exchange, but as a foreign private issuer, Philips’ common stock was also registered with the SEC and publicly traded through a secondary listing on the New York Stock Exchange. Philips previously settled an FCPA-related enforcement action with the SEC in 2013.

Philips operated in the Chinese healthcare market through two subsidiaries, Philips Electronics Hong Kong Ltd. and Philips (China) Investment Co., Ltd., collectively "Philips China."

According to the documents in this case, between 2014 and 2019, Philips China used special price discounts with distributors that created a risk that excessive distributor margins could be used to fund improper payments to government employees. Moreover, the SEC alleged that employees, distributors, or sub-dealers of Philips’ subsidiaries in China engaged in improper conduct to influence hospital officials to draft technical specifications in public tenders to favor Philips’ products. As a result of these practices, Philips made approximately $41 million in profits.

In a settled administrative proceeding initiated on May 11, 2023, the SEC ordered Philips to cease and desist violations of the books and records and internal controls provisions of the FCPA. Under the terms of the settlement, Philips agreed to pay $41,126,170 in disgorgement, plus $6,047,633 of prejudgment interest, and a civil monetary penalty of $15,000,000. Philips further agreed to report on the status of the company's enhanced FCPA compliance for a term of two years. The SEC noted Philips' cooperation and remediation.

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