A Ralph Lauren bribery case was settled Monday when the Securities and Exchange Commission (SEC) released a non-prosecution agreement (NPA) with the company. The SEC will not prosecute the company under the Foreign Corrupt Practices Act (FCPA) because Ralph Lauren Corporation discovered the problem itself during an internal review and then reported it promptly to the federal authorities.
In Monday’s statement, the SEC said that the NPA is the first time that they have entered into such an agreement in a case involving FCPA misconduct. The NPA is part of the SEC’s Cooperation Initiative, intended to reward companies that cooperate with investigations.
FCPA Unit Chief Kara Brockmeyer announced: “This NPA shows the benefit of implementing an effective compliance program. Ralph Lauren Corporation discovered this problem after it put in place an enhanced compliance program and began training its employees. That level of self-policing along with its self-reporting and cooperation led to this resolution.”
The bribery took place from 2004 to 2009 in Argentina. The Ralph Lauren’s Argentine subsidiary frequently bribed government and customs officials to facilitate the importation of company products.
However, FCPA is a federal law that has prohibited paying bribes even in foreign countries since the 1970s.
The Ralph Lauren subsidiary paid $593,000 in bribes and gifts to Argentine officals. Therfore, under the NPA, they will pay a $593,000 “disgorgement” plus an additional roughly $142,000 in interest.
The US Department of Justice entered into a parallel NPA in the Ralph Lauren bribery case, assessing an $882,000 fine.
The value of Ralph Lauren shares dipped less than two percent on the news. The company, which had already started retraining its employees to avoid similar bribery issues, seemed satisfied with the resolution. A MarketWatch commentator said that they had got off cheap because they were so proactive about reporting the problem.
All told, Ralph Lauren is paying around $1.6 million to resolve the bribery case.