Massachusetts-based internet services provider Akamai Technologies and Rhode Island-based residential and commercial building products manufacturer Nortek Inc. entered into non-prosecution agreements with the Securities and Exchange Commission (SEC).
The two companies will forfeit ill-gotten gains connected to bribes paid to Chinese officials by foreign subsidiaries.
Akamai was represented by Joshua Levy of Ropes & Gray in Boston and Nortek was represented by Luke Cadigan of K&L Gates in Boston.
In letters to Levy and Cadigan, the Justice Department’s Foreign Corrupt Practices Act (FCPA) unit chief Daniel Kahn declined prosecution.
Akamai Technologies will pay $652,452 in disgorgement plus $19,433 in interest.
According to the non prosecution agreement, Akamai’s foreign subsidiary arranged $40,000 in payments to induce government-owned entities to purchase more services than they actually needed.
Employees at the foreign subsidiary violated the company’s written policies by providing improper gift cards, meals, and entertainment to officials at these state-owned entities to build business relationships.
Nortek will pay $291,403 in disgorgement plus $30,655 in interest.
According to the non prosecution agreement, approximately $290,000 in improper payments and gifts were made to Chinese officials by Nortek’s subsidiary in order to receive preferential treatment, relaxed regulatory oversight, or reduced customs duties, taxes, and fees.
These included cash payments, gift cards, meals, travel, accommodations, and entertainment.
The SEC said that both companies self-reported the misconduct promptly, and they cooperated extensively with the ensuing SEC investigations.
The non-prosecution agreements stipulate that the companies are not charged with violations of the Foreign Corrupt Practices Act (FCPA) and do not pay additional monetary penalties.
“When companies self-report and lay all their cards on the table, non-prosecution agreements are an effective way to get the money back and save the government substantial time and resources while crediting extensive cooperation,” said Andrew Ceresney, Director of the SEC Enforcement Division.
“Akamai and Nortek each promptly tightened their internal controls after discovering the bribes and took swift remedial measures to eliminate the problems,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit. “They handled it the right way and got expeditious resolutions as a result.”