Firearms manufacturer Smith & Wesson has agreed to pay $2 million to settle U.S. Government charges over bribes the company allegedly paid out to foreign officials between 2007 and 2010.
The Springfield, Mass.-based company had faced charges from the Securities and Exchange Commission, which said employees and representatives of the company made improper payments to military and political officials in Pakistan, Indonesia and other foreign countries in order to win coveted firearm supply contracts in those countries.
Smith & Wesson’s alleged actions violated the Foreign Corrupt Practices Act (FCPA), the SEC said Monday, adding that the company “profited by more than $100,000” from the one contract to be completed before the authorities caught wind of the activities.
In addition to the $2 million payment, Smith & Wesson has agreed to report its FCPA compliance efforts to the SEC for a period of two years. Smith & Wesson, which has fired its entire international sales staff as a result of the charges, is neither admitting nor denying the SEC’s charges as part of the settlement announced Monday.
“This is a wake-up call for small and medium-size businesses that want to enter into high-risk markets and expand their international sales,” Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit, said in a statement. “When a company makes the strategic decision to sell its products overseas, it must ensure that the right internal controls are in place and operating.”
Smith & Wesson CEO James Debney says he believes the settlement “is in the best interests” of the company and its shareholders.
“Today’s announcement brings to conclusion a legacy issue for our company that commenced more than four years ago, and we are pleased to now finally put this matter behind us,” Debney said in a statement.