That stock News

WASHINGTON – Equipment maker RAE Systems Inc. has agreed to pay $1.25 million to settle civil charges of bribing Chinese officials to win government contracts in that country from 2004 to 2008, federal regulators said Friday.

The Securities and Exchange Commission announced the settlement with RAE Systems, which is paying about $1.15 million in restitution plus $109,000 in interest.

In a civil lawsuit filed in federal court in Washington, the SEC had accused the company of paying $400,000 in bribes that brought it contracts worth $3 million for gas and chemical detection equipment, and about $1.1 million in illicit profits.

RAE Systems, based in San Jose, Calif., neither admitted nor denied the allegations under the settlement. It agreed to avoid future violations of the Foreign Corrupt Practices Act and to strengthen its program of compliance with the law, which prohibits bribery of foreign government officials or company executives to secure or retain business.

"The management is pleased to have resolved the lawsuit," said Kirsten Chapman, a spokeswoman for RAE Systems.

A number of U.S. and foreign companies have been charged with violating the anti-bribery law in recent years.

The SEC said the illegal payments were made mostly by Chinese sales personnel used by RAE Systems at two of its joint ventures in China: RAE-KLH (Beijing) Co. Ltd. And RAE Coal Mine Safety Instruments (Fushun) Co. Ltd. The sales employees usually made the payments by getting cash advances from accounting personnel, according to the SEC. They were recorded on the two joint ventures' books as "business fees" or "travel and entertainment" expenses, the agency said.

Luxury gifts provided to Chinese government officials by sales employees are said to have included jade, fur coats, kitchen appliances, suits and expensive liquor.

RAE Systems failed to act on red flags indicating the payment of bribes, the SEC said. "Companies that fail to respond to red flags can be held liable for the acts of their joint-venture partners," Cheryl Scarboro, who heads the SEC's Foreign Corrupt Practices Act unit, said in a statement.

View the original article here

WASHINGTON – The Obama administration's former auto czar agreed Thursday to pay $6.2 million to settle civil charges over his role in an influence-peddling scandal involving New York state's public pension fund.

The Securities and Exchange Commission announced the settlement with investment banker Steven Rattner. As part of the settlement, Rattner will also be barred for at least two years from working in the securities industry.

The SEC alleged that Rattner and his private-equity firm Quadrangle Group provided kickbacks, political favors and personal benefits in 2004-05 to get access to business from the state's $125 billion pension fund.

Rattner neither admitted nor denied the charges that were filed in a federal court in Manhattan. But he agreed not to violate the securities laws in the future. The settlement, which must be approved by the court, calls for Rattner to pay a $3 million fine and about $3.2 million in restitution.

In a separate but related action Thursday, New York Attorney General Andrew Cuomo filed two suits against Rattner also accusing him of paying illegal kickbacks to help Quadrangle land a lucrative investment from the pension fund.

Cuomo is seeking at least $26 million from Rattner and a lifetime ban from the securities industry.

Rattner, a major political fundraiser for Democrats and influential policy figure, left the firm last year to become co-leader of the White House task force that restructured General Motors and Chrysler. He left the government in July and has been promoting his new book on the auto industry since.

The money Rattner is paying to settle the charges represents a fraction of his wealth. He reported net worth last year of between $188 million and $608 million. But banning him from the industry, even a temporarily, could greatly limit his earning potential.

View the original article here