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Enforcement Action Dataset

 

Initiation Date:    06/21/2016  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Name of Prosecuting Attorneys:    Unknown

Assisting Agencies:    U.S. Department of Justice , Federal Bureau of Investigation , British Virgin Islands Financial Services Commission , Latvian Financial and Capital Market Commission , Danish State Prosecutor for Serious Economic and International Crime , Austrian Financial Market Authority , U.S. Attorney's Office for Massachusetts

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Analogic Corporation was a Massachusetts corporation that designed and manufactured advanced medical imaging, ultrasound, and security technology systems. The company's shares were registered with the SEC and traded on the NASDAQ under the symbol “ALOG.” Analogic had multiple subsidiaries, including BK Medical Aps, a wholly-owned Danish subsidiary that Analogic acquired in 1996 and which focused on the manufacture and sale of ultrasound systems.

Lars Frost, a Danish citizen and resident, was BK Medical's Chief Financial Officer from roughly October 2008 to September 2011.

From about 2001 to 2011, BK Medical participated in hundreds of suspicious transactions in Russia, Ghana, Israel, Kazakhstan, Ukraine, and Vietnam at the direction of its distributors in those countries. These transactions posed a significant risk of bribery or other improper conduct because of the way they were structured, which involved overpayments to BK Medical by its distributers based on inflated invoices. The excess funds from these overpayments were then funneled to unknown third parties all over the world for unknown reasons. Approximately $20 million flowed through BK Medical from these distributors, with over $16 million from BK Medical’s Russian distributor alone.

On June 21, 2016, the SEC filed a settled administrative action against Analogic and Frost alleging violations of the books & records and internal controls provisions of the FCPA. Under the terms of the settlement, the SEC ordered Analogic and Frost to cease and desist violations of the FCPA. Analogic was ordered to pay disgorgement of $7,672,651 plus prejudgment interest of $3,810,311, but in light of the criminal fine levied against BK Medical in its Non-Prosecution Agreement with the DOJ, the SEC imposed no civil fine on Analogic. The SEC further acknowledged Analogic's self-reporting, cooperation, and remedial measures. Frost was ordered to pay a civil fine of $20,000.

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