SEC Charges Polycom, Inc. with FCPA Violations
Dec. 26, 2018
File No. 3-18964
December 26, 2018 - The Securities and Exchange Commission today announced that Polycom, Inc., a San Jose, California based provider of communications products, has agreed to pay more than $16 million to settle charges that it violated the Foreign Corrupt Practices Act (FCPA) in connection with its Chinese subsidiary facilitating improper payments to government officials.
According to the SEC's order, from 2006 through 2014, Polycom's Chinese subsidiary used its local distributors and resellers to make illicit payments to Chinese government officials in exchange for assistance in securing deals for Polycom products. The SEC found that Polycom's Chinese subsidiary provided product discounts to the distributors and resellers with the understanding that they would use the discounts to make cash payments to government officials who exercised influence over the customers' purchasing decisions. When managers at Polycom's Chinese subsidiary recorded details about these deals in Polycom's official systems, they provided false justifications for the discounts. The SEC's order found that, during the relevant time period, Polycom failed to maintain a sufficient system of internal accounting controls and lacked an effective anti-corruption compliance program with regard to its Chinese sales operations. Polycom was taken private in 2016 and is now a wholly-owned subsidiary of Plantronics, Inc.
The SEC found that Polycom violated books and records and internal accounting controls provision of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. Without admitting or denying the allegations, the company agreed to pay disgorgement of $10,672,926, prejudgment interest of $1,833,410, and a civil penalty of $3,800,000.
The SEC’s investigation was conducted by Matthew G. Meyerhofer and supervised by Tracy L. Davis of the San Francisco Regional Office. The SEC appreciates the assistance of the Fraud Section of the United States Department of Justice.