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SEC v. Ralph Lauren Corporation

 
:
Ralph Lauren Corporation
:
SEC Civil
:
April 22, 2013
:
SEC v. Ralph Lauren Corporation
:
This is the SEC's first non-prosecution agreement in an FCPA enforcement action. In a press release, the SEC cited Ralph Lauren Corporation's "prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC's investigation" as the primary reason for the non-prosecution agreement. The SEC noted that the corporation disclosed to the SEC its FCPA violations within two weeks of discovering them, a decision which "saved the agency substantial time and resources ordinarily consumed in investigations of comparable conduct." According to the SEC, the non-prosecution agreement should serve as a positive example to other companies of the "substantial and tangible benefits [available to] companies that respond appropriately to violations and cooperate fully with the SEC." Ralph Lauren Corporation neither admitted nor denied the allegations against it by the SEC when it entered into the non-prosecution agreement.

:
Apparel
:
Argentina
:
2005; 2006; 2007; 2008; 2009
:
Argentine customs officials; Argentine government officials
:
Ralph Lauren Corporation ("RLC") is a Delaware corporation headquartered in New York, whose shares are traded on the New York Stock Exchange. The company is in the business of design, marketing, and distribution of apparel, accessories, and other products around the world.

According to the statement of facts attached to RLC's non-prosecution agreement with the SEC (allegations which RLC neither admitted nor denied), from 2005 to 2009 RLC's Argentine subsidiary ("RLC Argentina") allegedly paid bribes and gifts to Argentine customs officials to assist in improperly obtaining paperwork necessary for its products to clear customs, permit clearance of items without the necessary paperwork, permit clearance of prohibited goods, and to avoid inspection of products by Argentine customs officials. RLC Argentina had retained a customs broker to assist with issues related to the importation of merchandise into Argentina. Later, the corporation allegedly used this customs broker to faciliate the bribes and pass them on to the customs officials. During the relevant period, the corporation allegedly paid $568,000 to the customs broker for the purpose of bribing Argentine customs officials.

In addition, the SEC alleged that the general manager of RLC Argentina directly provided or authorized provision of several gifts to three Argentine government officials to improperly secure the importation of the corporation's products into Argentina. These gifts included perfume, dresses, and handbags valued at between $400 and $14,000 each.

During the time in which the bribes allegedly occurred, RLC did not have an anti-corruption program in place and did not provide anti-corruption training or oversight to its Argentine subsidiary.

Upon discovering the bribes, RLC ceased its operations in Argentina.
:
Non-prosecution Agreement
:
Under the non-prosecution agreement, Ralph Lauren Corporation agreed to pay $593,000 in disgorgement and $141,846 in prejudgment interest.

In the parallel criminal action, RLC entered into a non-prosecution agreement with the DOJ and agreed to pay a monetary penalty of $882,000.
:
734,846
:
0
:
Issuer
:
U.S.
:
Customs Clearance
:
Not stated.
:
Cash, Gifts
:
Customs Broker or Agent/Consultant
:
583,000
:
Argentina
:
Argentina
:
No
:
Yes