United Technologies to Pay $13.9 Million to Settle SEC FCPA Charges

United Technologies Corporation will pay $13.9 million to resolve Securities and Exchange Commission (SEC) charges that it violated the Foreign Corrupt Practices Act (FCPA) by making illicit payments in its elevator and aircraft engine businesses.

United Technologies was represented by William Stuckwisch of Kirkland & Ellis in Washington, D.C.

The SEC found that United Technologies subsidiary Otis Elevator Co. made unlawful payments to Azerbaijani officials to facilitate the sales of elevator equipment for public housing in Baku and as part of a kickback scheme to sell elevators in China.

The SEC found that United Technologies, through its joint venture, made payments to a Chinese sales agent in a bid to obtain confidential information from a Chinese official that would help the company win engine sales to a Chinese state-owned airline.

The SEC also found that United Technologies improperly provided trips and gifts to various foreign officials in China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia through its Pratt & Whitney division and Otis subsidiary in order to obtain business.

On March 7, 2018, the Department of Justice notified the company that it had decided to close its investigation of the matter.

“U.S. companies with global operations must implement policies and procedures that prevent bribery and motivate employees to perform ethically,” said Tracy L. Price, Deputy Chief of the SEC Enforcement Division’s FCPA Unit.  “Issuers with weak internal accounting controls open the door to corruption and other financial misconduct.”

United Technologies consented to the SEC’s order without admitting or denying the findings that it violated the anti-bribery, books and records, and internal accounting controls provisions of the Securities Exchange Act of 1934, and the company agreed to pay disgorgement of $9,067,142 plus interest of $919,392 and a penalty of $4 million.


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