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Lauren Randell Quoted in Westlaw CQ Roll Call Article, "Analogic to Improve Oversight After Settling Bribery Charges with SEC"

Lauren Randell was quoted in Amy Lee Rosen's Westlaw CQ Roll Call article, Analogic to improve oversight after settling bribery charges with SEC," on Wednesday, June 22, 2016. 

Analogic Corp. says it will better vet deals arising from a foreign subsidiary and enhance its governance under a settlement with the Securities and Exchange Commission over “sham” transactions with overseas distributors.

The medical device company will avoid prosecution because it self-reported the findings of an internal investigation to the agency and made remedial efforts to stop the bogus transactions, although it will pay a fine. As part of the deal, the company agreed to hire a corporate compliance controller and add compliance training for foreign and domestic employees.

The SEC said Analogic’s Danish subsidiary, BK Medical ApS, engaged in hundreds of transactions with distributors that funneled about $20 million to third parties in Russia and apparent shell companies in Belize, the British Virgin Islands, Cyprus and Seychelles. The SEC order says the conduct lasted at least nine years. The company is accused of violating Foreign Corrupt Practices Act violations (PL 95-213), which forbids these types of payments in return for obtaining business.

This latest settlement shows the agency and the Department of Justice are cracking down on foreign bribery, according to governance experts who say directors in their roles within the audit process should examine these cases closely. In April, the DOJ launched a new FCPA pilot program designed to motivate companies to voluntarily self-disclose misconduct that can trigger lighter penalties.

”From a governance perspective in general, directors play a key role in emphasizing the need for FCPA compliance, especially in a global company with subsidiaries conducting business in high-risk jurisdictions,” said Lauren R. Randell, a partner at law firm Buckley Sandler LLP. “The directors set the tone at the top that compliance should not take a back seat to business generation, and then provide the oversight that management is also following that philosophy. Direct reporting to the board by compliance and audit personnel is key.”

Originally published by Westlaw CQ Roll Call; reprinted with permission.