Tuesday, August 3, 2010
The SEC settled Foreign Corrupt Practices Act books and records and internal controls charges against General Electric Company ("GE") and two GE subsidiaries — Ionics, Inc. (currently GE Ionics, Inc.) and Amersham plc (currently GE Healthcare Ltd.). The SEC alleges that two GE subsidiaries — along with two other subsidiaries of public companies that have since been acquired by GE — made $3.6 million in illegal kickback payments in the form of cash, computer equipment, medical supplies, and services to the Iraqi Health Ministry or the Iraqi Oil Ministry in order to obtain valuable contracts under the U.N. Oil for Food Program.
GE; Ionics, Inc.; and Amersham plc failed to maintain adequate systems of internal controls to detect and prevent the payments; and the defendants' accounting for these transactions failed properly to record the nature of the payments. GE; Ionics, Inc.; and Amersham plc, without admitting or denying the allegations in the Commission's complaint, consented to the entry of a final judgment permanently enjoining them from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and ordering GE to disgorge $18,397,949 in wrongful profits, pay $4,080,665 in pre-judgment interest, and pay a civil penalty of $1,000,000.
The settlement with GE represents the Commission's fifteenth enforcement action brought in connection with the UN Oil for Food Program. In total, the SEC has recovered over $204 million in disgorgement of profits, prejudgment interest, and civil penalties in Oil for Food-related cases.
The Commission considered remedial acts promptly undertaken by GE and the cooperation the company afforded the Commission staff in its investigation. The Commission acknowledges the assistance of the Department of Justice, Fraud Section, and the United Nations Independent Inquiry Committee.