On December 15, 2014, the Securities and Exchange Commission charged Bruker Corporation with violating the Foreign Corrupt Practices Act by making $230,000 in improper payments to Chinese government officials to win business. Bruker, a Massachusetts-based global manufacturer of scientific instruments for molecular and materials research, is publicly traded on NASDAQ. Bruker self-reported its conduct and cooperated with the investigation.
The SEC found that Bruker lacked sufficient controls to prevent and detect improper payments made from its China-based offices which were recording the payments as legitimate expenses. Some of those expenses involved reimbursing Chinese officials for leisure (non-business) travel, while other payments were made to Chinese officials in connection with collaboration agreements with state-owned enterprises.
To resolve the matter, Bruker agreed to pay a $375,000 penalty, $1,714,852 in disgorgement, and $310,117 in prejudgment interest. SEC stated in its press release that it "considered the company’s significant remedial acts as well as its self-reporting and cooperation with the investigation when determining a settlement."
The government's pronouncements about cooperation credit are demonstrated in this case and other recent cases like Layne Christensen. However, program enhancement and remediation are key to moving on from events, whether an investigation is disclosed or not. Internal controls, especially in compliance-sensitive areas like travel and entertainment, are expected to prevent and detect improper payments abroad and be immune to management work-arounds.
