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SEC charges Texas-based company with FCPA violations
by Joseph Earnest October 30, 2014
Newscast Media WASHINGTON—The Securities and Exchange Commission has charged a global water management, construction, and drilling company headquartered in Texas with violating the Foreign Corrupt Practices Act (FCPA) by making improper payments to foreign officials in several African countries in order to obtain beneficial treatment and reduce its tax liability.
After Layne Christensen Company self-reported its misconduct, an SEC investigation determined that the company received approximately $3.9 million in unlawful benefits during a five-year period as a result of bribes typically paid through its subsidiaries in Africa and Australia. Some payments were funded through cash transfers from Layne’s U.S. bank accounts.
In addition to self-reporting the misconduct, Layne cooperated with the SEC's investigation by providing real-time reports of its investigative findings, producing English language translations of documents, and making foreign witnesses available. The company also undertook an extensive remediation effort. Layne agreed to pay more than $5 million to settle the SEC's charges.
"Layne's lack of internal controls allowed improper payments to government officials in multiple countries to continue unabated for five years," said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit. "However, Layne self-reported its violations, cooperated fully with our investigation, and revamped its FCPA compliance program. Those measures were credited in determining the appropriate remedy."
Click here to read or download the SEC order. (pop-up)
According to the SEC's order instituting settled administrative proceedings, Layne's misconduct occurred from 2005 to 2010. In addition to favorable tax treatment, the improper payments helped the company obtain customs clearance, work permits, and relief from inspections by immigration and labor officials in various African countries. Add Comments>>
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