$9.5 Million SEC FLIR Settlement Emphasizes Benefits of Self-Reporting and Importance of Internal Controls

Employees often ask compliance officers about what is acceptable when entertaining or providing gifts to foreign officials.  How much is too much?  The FLIR fact pattern provides a clear case of “too much.”  Months after two of its employees had been sanctioned for the same behavior, FLIR Systems, Inc., an Oregon-based company that develops infrared technology, has resolved SEC charges that it took key officials of the Saudi Arabia Ministry of Interior on an extensive “world tour” and bought them luxury gifts.  “FLIR’s deficient financial controls failed to identify and stop the activities of employees who served as de facto travel agents for influential foreign officials to travel around the world on the company’s dime,” said Kara Brockmeyer, Chief of the SEC Enforcement Division’s FCPA Unit.  Despite the extravagant travel and gifts, FLIR did escape a DOJ enforcement action.  We discuss the details and takeaways from the case.  See also “A Guide to Preventing and Detecting Travel Agency Corruption (Part One of Three)” (Jan. 8, 2014); Part Two of Three (Jan. 22, 2014); Part Three of Three (Feb. 5, 2014).

To read the full article

Continue reading your article with an ACR subscription.