Investing.com -- The U.S. Securities and Exchange Commission announced on Tuesday that it reached a non-prosecutorial agreement with a Rhode Island-based residential and commercial building products company in connection with a series of bribes it paid to Chinese officials by foreign subsidiaries.
Nortek, Inc., a Providence-based, diversified industrial company, agreed to pay a fine of $291,403 in disgorgement plus interest of $30,655 stemming from a wide range of improprieties covered in the Foreign Corrupt Practices Act (FCPA), the SEC said in a statement. A Nortek foreign subsidiary, according to the non-prosecutorial agreement, paid approximately $290,000 in gifts and improper payments to officials in China ranging from cash payments, gifts and meals to travel, accommodation and entertainment. As a result, the company receive preferential treatment from Chinese authorities in the form of relaxed regulatory oversight and reduced customs duties, taxes, and fees.
Separately, Akamai Technologies (NASDAQ:AKAM) agreed to pay a fine of $652,452 in disgorgement plus $19,433 in interest relating to bribes it made to officials in China in violation of FCPA. Employees at the Massachusetts-based internet service provider allegedly provided gift cards, entertainment and meals to officials in exchange for receiving a more favorable business relationship, according to the agreement.
"When companies self-report and lay all their cards on the table, non-prosecution agreements are an effective way to get the money back and save the government substantial time and resources while crediting extensive cooperation," said Andrew Ceresney, Director of the SEC Enforcement Division.
Both companies self-reported the misconduct promptly, and cooperated extensively with the ensuing investigations, the SEC said. As part of the agreement, the companies will not be charged with violations of the FCPA or face additional monetary penalties.
"Akamai and Nortek each promptly tightened their internal controls after discovering the bribes and took swift remedial measures to eliminate the problems," said Kara Brockmeyer, chief of the SEC's FCPA unit. "They handled it the right way and got expeditious resolutions as a result.”
Nortek shares were inactive in after-hours trading. Nortek closed Tuesday's session at 49.36, down 0.03 or 0.06%.