Canada’s Westport Fuel Systems, Inc. has settled allegations that it violated U.S. anti-corruption laws by arranging bribes to a Chinese government official.
The U.S. Securities and Exchange Commission (SEC) announced a settlement today with Vancouver-based Westport Fuel and its former CEO, Nancy Gougarty, that will see them pay more than US$4.1 million to resolve charges that they violated the U.S. Foreign Corrupt Practices Act (FCPA).
According to the SEC’s order, Westport, Gougarty and others engaged in a bribery scheme by transferring shares in Westport’s Chinese joint venture to a Chinese private equity fund, in which a government official owned a stake.
The SEC also alleged that Westport hid the identity of the fund in its public filings and in its own books “by falsely identifying a different entity as the counterparty to the transaction.”
Westport and Gougarty settled the allegations without admitting or denying the SEC’s findings.
To settle the charges, the company agreed to pay more than US$2.5 million in disgorgement and a US$1.5 million penalty. Gougarty agreed to pay a US$120,000 penalty.
In settling the case, the SEC said it considered the remedial action taken by the firm and its cooperation with the regulator’s investigation.
“A company’s commitment to compliance is only as strong as the effort put in by senior management,” said Charles Cain, chief of the SEC enforcement division’s FCPA unit. “Here, the chief executive exploited weaknesses in the company’s controls to engage in bribery, undermining shareholder interests.”