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.
In December 2013 and January 2014, UTC voluntarily disclosed to the DOJ, SEC, and U.K.'s Serious Fraud Office its internal investigation into a non-employee sales representative retained by UTC's subsidiaries United Technologies International Operations, Inc. ("UTIO") and IAE International Aero Engines AG ("IAE") for the sale of Pratt & Whitney and IAE aircraft engines and aftermarket services in China.
On April 7, 2014, the SEC issued a subpoena to UTC seeking the production of documents related to the company's internal investigation.
On March 9, 2015, the SEC issued a second subpoena to UTC, this time seeking documents about possible violations of anti-bribery laws by UTC’s aerospace and commercial businesses, which included, among others, subsidiary Otis Elevator Company's businesses in China.
When UTC discovered possible misconduct by the sales representative for UTIO and IAE and began its internal investigation, the company suspended all commission payments to the sales representative. This cessation of payments led to a lawsuit and an arbitration claim filed by the sales representative against UTIO and UTC, respectively, for unpaid commissions. In December 2014, the sales representative voluntarily dismissed the lawsuit and agreed to withdraw the arbitration claim, both without prejudice.
In its 10-Q filed on April 27, 2018, UTC disclosed that the DOJ had notified the company on March 7, 2018 that it had closed its investigation and would not pursue any further action.
In its July 27, 2018, 10-Q, UTC disclosed that based on its settlement discussions with the SEC, the company had accrued approximately $11 million in the second quarter of 2018.
On September 12, 2018, the SEC issued a cease and desist order against UTC. Under the terms of the order, UTC agreed to pay just under $14 million in sanctions.
