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RAE Systems paying $1.25 million in SEC case (AP)



WASHINGTON – Equipment maker RAE Systems Inc. has agreed to pay $1.25 million to settle civil charges of bribing Chinese officials to win government contracts in that country from 2004 to 2008, federal regulators said Friday.

The Securities and Exchange Commission announced the settlement with RAE Systems, which is paying about $1.15 million in restitution plus $109,000 in interest.

In a civil lawsuit filed in federal court in Washington, the SEC had accused the company of paying $400,000 in bribes that brought it contracts worth $3 million for gas and chemical detection equipment, and about $1.1 million in illicit profits.

RAE Systems, based in San Jose, Calif., neither admitted nor denied the allegations under the settlement. It agreed to avoid future violations of the Foreign Corrupt Practices Act and to strengthen its program of compliance with the law, which prohibits bribery of foreign government officials or company executives to secure or retain business.

“The management is pleased to have resolved the lawsuit,” said Kirsten Chapman, a spokeswoman for RAE Systems.

A number of U.S. and foreign companies have been charged with violating the anti-bribery law in recent years.

The SEC said the illegal payments were made mostly by Chinese sales personnel used by RAE Systems at two of its joint ventures in China: RAE-KLH (Beijing) Co. Ltd. And RAE Coal Mine Safety Instruments (Fushun) Co. Ltd. The sales employees usually made the payments by getting cash advances from accounting personnel, according to the SEC. They were recorded on the two joint ventures’ books as “business fees” or “travel and entertainment” expenses, the agency said.

Luxury gifts provided to Chinese government officials by sales employees are said to have included jade, fur coats, kitchen appliances, suits and expensive liquor.

RAE Systems failed to act on red flags indicating the payment of bribes, the SEC said. “Companies that fail to respond to red flags can be held liable for the acts of their joint-venture partners,” Cheryl Scarboro, who heads the SEC’s Foreign Corrupt Practices Act unit, said in a statement.

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Evolving Systems, Inc. (EVOL) Chairman and CEO to Ring The NASDAQ Stock Market Closing Bell



Evolving Systems, Inc. (EVOL) Chairman and CEO to Ring The NASDAQ Stock Market Closing Bell
ADVISORY — What:

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