The Securities and Exchange Commission fined a California telecommunications company $300,000 for bribing employees at government-controlled firms in China and Vietnam, the agency said on Tuesday.
The SEC accused the San Jose-based Veraz Networks, Inc., which makes internet phone systems, of violating the books and records and internal controls provisions of the Foreign Corrupt Practices Act.
The case is one of the first the SEC has filed since it created a unit dedicated to FCPA enforcement in January. The unit is based in Washington, D.C., but also includes lawyers from six of the SEC’s regional offices. The agency’s San Francisco office, which handled the Veraz case, also said last month its FCPA team would focus on investigating companies based in Silicon Valley.
Yesterday, French engineering firm Technip S.A. agreed to pay $338 million to settle FCPA charges brought by the Justice Department and the SEC. The case against Veraz was brought only by the SEC.
From 2007 to 2008, Veraz employees and consultants in China offered employees of a government-controlled telecom companies in China around $40,000 in exchange for business, the SEC said.
According to the SEC, in 2007 a Veraz consultant offered around $4,500 in gifts to officials at a Chinese telecom firm — referred to only as “Telecommunications Company 1″ in the complaint. The consultant’s supervisor referred to the payment as a “gift scheme,” the SEC said.
Then in January 2008, the consultant offered the officials a 15 percent cut of a $233,000 deal in order to win the contract, according to the SEC.
Veraz had submitted a higher bid than other firms, the SEC said, but still received the contract. The company canceled the sale after discovering the bribes, according to the SEC.
A separate Veraz employee also paid for gifts and entertainment for officials at a government-controlled telecommunications company in Vietnam and sent flowers to the wife of that company’s CEO, the SEC said.
SEC attorneys Monique C. Winkler, Robert S. Leach, and Cary Robnett, who are based in the agency’s San Francisco office, investigated the case.
[...] and Exchange Commission’s Division of Enforcement criticized the SEC’s recent settlement with California-based telecommunications company Veraz Networks, Inc. for Foreign Corrupt Practices [...]