Courtesy of Benzinga.
The SEC has just released information pertaining to the charging of Smith & Wesson (NASDAQ: SWHC) for violating the Foreign Corrupt Practices Act (FCPA). The US regulator was able to get Smith & Wesson to agree to a $2M fine to settle the charges.
The SEC states:
"…employees and representatives of the U. S. -based parent company authorized and made improper payments to foreign officials while trying to win contracts to supply firearm products to military and law enforcement overseas."
According to the release, Smith & Wesson sough access to new markets overseas in 2007 and continued through 2010. During that period the firearm manufacture's sale staff engaged in a pervasive effort to attract business. The acts included offering, authorizing, or making illegal payments or providing gifts in Pakistan, Indonesia, and other foreign countries.
Regarding the activity in Pakistan, the SEC states Smith & Wesson used a third-party in 2008 to help provide more than $11,000 worth of guns to Pakistan police officials as gifts then made additional cash payments. The act sealed Smith & Wesson contract to sell 548 pistons to the Pakistan police for a profit of $107,852.
In 2009 Smith & Wesson won a contract in Indonesia under similar improper payments. The same attempts were made in Turkey, Nepal, and Bangladesh though the attempts were unable to secure any contracts for Smith & Wesson.
Smith & Wesson has agreed to pay "$107,852 in disgorgement, $21,040 in prejudgment interest, and a $1.906 million penalty".
Shares as traded up on the news, spiking roughly 1 percent to a high of $13.81 mid-way through Monday's trading session.
