SEC Complaint Demonstrates That Domestic Bribery Falls Within Its Jurisdiction

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On June 27, 2012, the SEC charged a New York data storage company with misleading investors about bribes it paid to obtain business with a subsidiary of a major investment bank. The SEC alleged in its complaint that the defendant company's co-founder and then CEO made materially misleading statements on earnings calls, failed to accurately record the expenses associated with the bribes on its books and records, and failed to devise or implement a system of effective internal accounting controls to detect or prevent the bribes, which violated state law and were inconsistent with the defendant's policies. Thus, the SEC charged, the defendant violated certain antifraud provisions of the federal securities laws and acted contrary to its own internal controls policies.

 

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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