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SEC v. Avery Dennison Corporation

 
:
Avery Dennison
:
SEC Civil
:
July 28, 2009
:
SEC v. Avery Dennison Corporation
:
SEC v. Avery Dennison Corp., No. 2:09-cv-5493 (C.D. Cal. 2009); In re Avery Dennison Corp., SEC Admin. Proceeding No. 3-13564 (2009)
:
Manufacturing-Other/Multi
:
China
:
2002; 2003; 2004; 2005
:
Chinese government officials; Indonesian customs and tax officials
:
Avery Dennison settled this action with the SEC without admitting or denying the following facts alleged in the SEC's complaint.

Avery China, a wholly owned subsidiary of Avery Dennison Corporation, a Delaware entity, sold reflective materials commonly used in printing and road signs. In China, the government required authorization for all products used in road communications and safety. From the period of 2002 through 2005, Avery China attempted to pay Chinese government officials kickbacks to obtain such authorization and gain lucrative contracts. Avery employees discovered some of the illegal payment schemes and stopped them, but others were paid out, including a $24,752 payment to a project manager in 2005 to obtain profits of $273,213 on a sale. In addition, Avery China hosted expensive sightseeing trips to curry favor with Chinese government officials in both 2002 and 2005.

In 2007, Avery acquired Paxar Corporation, a NYSE listed company. Avery later discovered that Paxar employees in Indonesia made illegal payments to customs and tax officials to obtain bonded zone licenses and to overlook bonded zone regulatory violations.

On July 28, 2009, the SEC filed two settled enforcement proceedings against Avery. The SEC filed a federal civil action in California charging Avery with violations of the books and records and internal controls provisions of the FCPA and seeking a civil penalty. The SEC also issued an administrative order finding that Avery violated the same provisions of the FCPA, ordering Avery to cease and desist from these violations and disgorge profits. In the civil action, Avery agreed to the entry of a final judgment requiring it to pay a civil penalty in the amount of $200,000.
:
Books and records (Issuer), Internal controls (Issuer)
:
Civil penalty, Disgorgement, Injunction/Cease and desist
:
Disgorgement of $273,213 plus $45,257 in prejudgment interest.

$200,000 in civil penalties.
:
518,470
:
0
:
Issuer
:
U.S.
:
Contract Procurement/Retention
:
1,250,218
:
Cash, Entertainment, Gifts
:
Subsidiary Company
:
81,000
:
China, Indonesia
:
China
:
In this case, the benefit obtained from the officials related to licenses and allowed the company to do business in a "bonded zone."
:
No