FLIR Systems Settles FCPA Claims with SEC

Settlement FLIR Systems Saudi Arabia

On April 8, the U.S. Securities and Exchange Commission (SEC) settled FCPA claims in an Administrative Proceeding against Oregon-based FLIR Systems Inc. (FLIR), which agreed to pay more than $9.5 million and report its FCPA compliance efforts to the SEC for the next two years to resolve the FCPA claims. The corporate settlement follows the SEC's settlement last year of charges with two FLIR employees. The SEC's settlement Order against FLIR — a developer of infrared technology for use in binoculars and other sensing products and systems — described violations of the FCPA's anti-bribery, books and records, and internal control provisions in connection with FLIR's activities in the Middle East, most notably unlawful travel, gifts, and entertainment to foreign officials in Saudi Arabia to obtain or retain business.   This included expensive watches and personal travel, which was referred to as a "world tour" by FLIR employees.  The "world tour" sent Saudi officials on a 20-night trip that included stops in Casablanca, Paris, Dubai, Beirut, and New York City.  FLIR then allegedly falsely recorded the value of the gifts and the extent and nature of the travel in its books and records as legitimate business expenses and failed to catch the improper payments due to poor internal controls. According to the Order, FLIR cooperated with the SEC's investigation and self-reported the conduct.  FLIR consented to the Order without admitting or denying the findings and agreed to pay disgorgement of $7,534,000, prejudgment interest of $970,584, and a penalty of $1 million for a total of $9,504,584.