In our most recent posting, we discussed the Non-Prosecution Agreement (NPA) entered into by the Department of Justice (DOJ) and RAE Systems Inc., on December 10, 2010. In this NPA, RAE agreed to pay a criminal penalty of $1.7 million to the DOJ and in an agreement with the SEC to pay $1,147,800 in disgorgement and $109,212 in prejudgment interest. RAE also "accepted responsibility for violating the internal controls and books and records provisions of the FCPA arising from and related to improper benefits corruptly paid by employees" of two RAE joint ventures in China. In addition to the financial fines and penalties agreed to by RAE, it agreed to implement a corporate compliance program to address the deficiencies in its internal controls, policies and procedures which led to or allowed the violations of the Foreign Corrupt Practices Act (FCPA). This post will review the Corporate Compliance Program which RAE agreed to enter into and discuss the factors detailed in the NPA which allowed RAE to escape the implementation of a Deferred Prosecution Agreement (DPA).
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