Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, October 1, 2007

York International Settles FCPA Charges

The SEC and York International settled anti-bribery, internal controls, and books and records charges under the Foreign Corrupt Practices Act.  York International, a global provider of heating, ventilation, air conditioning, and refrigeration products and services, was acquired by Johnson Controls, Inc. in 2005. The Commission's complaint alleges that York International's Delaware subsidiary paid approximately $522,500 to an intermediary while knowing that most of the money was intended to bribe United Arab Emirate officials; York International's Dubai subsidiary authorized and made approximately $647,110 in kickback payments under the U.N. Oil for Food Program; and that York International's subsidiaries devised elaborate schemes to conceal kickback payments of over $7.5 million made to secure orders on certain commercial and government projects in the Middle East, India, China, Nigeria and Europe.

York International, without admitting or denying the allegations in the Commission's complaint, consented to the entry of a final judgment permanently enjoining it from future violations of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934, ordering it to disgorge $8,949,132 in profits, plus $1,083,748 in pre-judgment interest, and to pay a civil penalty of $2,000,000. York International is also ordered to retain an independent compliance monitor. York International will also pay a $10 million fine pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section.

The Commission considered remedial acts promptly undertaken by York International, which self-reported, and cooperation afforded the Commission staff in its continuing investigation.

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