Bribery Raps Filed Against Maxwell Technologies
The Securities and Exchange Commission has filed charges of FCPA violations against Maxwell Technologies Inc. for bribing Chinese officials to close business deals with stated-owned firms in China.
“Maxwell‘s bribery allowed the company to obtain revenue and better financially position itself until new products were commercially developed and sold,” said Cheryl Scarboro, SEC’s Chief of the Foreign Corrupt Practices Act Unit.
In its lawsuit filed January 31 in the U.S. District Court for the District of Columbia, SEC claimed Maxwell’s wholly-owned Swiss subsidiary Maxwell Technologies SA has paid more than $2.5 million to certain Chinese officials through a third-party sales agent from 2002 to May 2009 to obtain contracts that turned over $15 million in revenues and $5.6 million in profits for the energy-related products manufacturer.
The SEC further claimed some Maxwell officials were fully aware of the bribery as one employee allegedly said in an e-mail that the payments were “kick-back, pay-off, bribe.” The payments were even reflected in invoices as “Extra Amount” or “Special Arrangement” fees, the SEC continued, that influenced “decisions by foreign officials to assist Maxwell in obtaining and retaining sales contracts for high voltage capacitors produced by Maxwell SA.”
This was the result of an ineffective internal control systems within Maxwell, the SEC said.
“The illicit sales and profits from the bribery scheme helped Maxwell offset losses that it incurred to develop its new products.”
Maxwell agreed to settle the charges by paying $5,654,576 in disgorgement and $696,314 in prejudgment interest. The SEC has also ordered Maxwell Technologies to sign undertakings requiring the company to comply with the FCPA.
Maxwell has also consented to pay $8 million to the U.S. Department of Justice in a separate settlement.