On April 22, 2013, the SEC announced it entered into a non-prosecution agreement (“NPA”) with Ralph Lauren Corporation. The SEC decided not to charge the company with FCPA violations because of the company’s extensive cooperation. This is the SEC’s first NPA involving FCPA violations. According to the NPA, Ralph Lauren Corporation will disgorge $700,000 in profits and interest. In parallel criminal proceedings, the Justice Department entered into an NPA with Ralph Lauren Corporation in which the company will pay an $882,000 penalty. According to the NPA, Ralph Lauren Corporation’s cooperation included:
- Reporting preliminary findings of its internal investigation to the SEC within two weeks of discovering the illegal conduct.
- Voluntarily and expeditiously producing documents.
- Providing English language translations of documents to the staff.
- Summarizing witness interviews that the company’s investigators conducted overseas.
- Making overseas witnesses available for staff interviews and bringing witnesses to the U.S.
The bribes occurred when the company did not have substantial anti-corruption compliance and control mechanisms over its Argentine subsidiary. The company discovered the misconduct as it was adopting measures to improve its internal controls and compliance efforts, including the implementation of an FCPA compliance training program. Ralph Lauren Corporation’s Argentine subsidiary paid bribes to government and customs officials to improperly secure the importation of Ralph Lauren Corporation’s products in Argentina without completing the proper paperwork and subjecting the goods to inspection by customs officials.