Securities and Exchange Commission v. Orthofix International N.V., Case No. 4:12-CV-419 (E.D. Tex.).  On July 10, 2012, the SEC filed a settled action against Orthofix International for violating the Foreign Corrupt Practices Act (“FCPA”).  From 2003 to 2010, Orthofix’s wholly-owned Mexican subsidiary, Promeca S.A. de C.V. (“Promeca”), paid bribes of about $317,000 to Mexican officials to obtain and retain sales contracts from a Mexican government-owned healthcare and social services institution.  Promeca employees referred to these payments as “chocolates.”   The payments were falsely recorded on the company’s books as cash advances to Promeca executives or training and promotions expenses, and generated about $8.7 million in gross revenues for Orthofix resulting in illicit net profits of about $4.9 million.

Orthofix agreed to settle the case, without admitting or denying the charges, by consenting to a final judgment ordering it to pay $4,983,644 in disgorgement and more than $242,000 in prejudgment interest, and enjoining it the company from violating the books and records and internal controls provisions of the FCPA.  Orthofix also agreed to monitor its FCPA compliance program and report back to the SEC for a two-year period.  In a related action, Orthofix agreed to pay $2.2 million to settle with the U.S. Department of Justice.