United Technologies recently settled an FCPA enforcement action with the SEC by paying $13.9 million for bribes paid by its elevator and aircraft businesses. UT disclosed the investigation to DOJ and the SEC in late 2013 or early 2014. DOJ declined to prosecute in March 2018. UT agreed to disgorge $9 million, plus interest of about $919,000 and to pay a penalty of $4 million.

 

The SEC's FCPA settlement contains extensive details on the conduct and the alleged violations ranging from bribery through third parties to excessive gifts and entertainment involving two significant subsidiaries, Pratt & Whitney and Otis Elevator. The settlement focused on bribery schemes in Azerbaijan and China relating to third-party bribery payments. In addition to these two bribery schemes, UT was cited for improper trips and gifts paid by Otis and its Pratt & Whitney division to foreign officials in China, Kuwait, South Korea, Pakistan, Thailand and Indonesia.

In this episode, Michael Volkov discusses the SEC's settlement with UTC and identifies important lessons learned from the investigation.