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U.S. v. Parametric Technology (Hong Kong) Ltd.

 
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Parametric Technology (Hong Kong) Ltd.
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DOJ Criminal
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February 16, 2016
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U.S. v. Parametric Technology (Hong Kong) Ltd.
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U.S. v. Parametric Technology (Hong Kong) Ltd. (2016)
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The DOJ agreed to a three year non-prosecution agreement with two PTC Inc. subsidiaries. In a related action against PTC, the SEC did not did not require a civil penalty due to the criminal penalty of $14.54 million in connection with the NPA.
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Computer & Information Technologies-Software
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China
:
2008; 2009; 2010; 2011
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Employees of state-owned entities in China
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PTC Inc. (formerly Parametric Technology Company) is a Massachusetts corporation. PTC’s stock is registered with the U.S. Securities and Exchange Commission and is listed on NASDAQ.

According to the DOJ, from at least 2008 to 2011, two wholly-owned PTC subsidiaries in China, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd (collectively “PTC China”) provided improper payments of over $1 million to customers who were employed at Chinese state-owned entities to obtain or retain business. The DOJ claims that PTC China made the improper payments in one of two ways: (1) by providing over $1 million to third party agents disguised as commission or sub-contracting payments that were used to pay for non-business foreign travel for the Chinese officials; and (2) by allowing sales staff to provide gifts and excessive entertainment of over $250,000 to the Chinese officials. During the time period, PTC China entered into more than $13 million in contracts with the Chinese state-owned entities.

The DOJ claims that PTC China employees and business partners directly or indirectly funded 24 trips that included a recreational component for Chinese officials. PTC China employees allegedly organized overseas trips in conjunction with visits to a PTC facility. As part of these business trips, PTC China employees allegedly included several days of sightseeing to destinations such as New York, Las Vegas, San Diego, and Hawaii for recreational purposes.

In addition to the above, between 2009 and 2011, PTC China employees directly provided gifts and entertainment of over $250,000 to Chinese officials, in part, to obtain or retain business from state-owned entities. The gifts and entertainment were made in contravention of PTC’s internal policies which impose approval requirements and monetary limits on gifts and entertainment for government officials.

On February 16, 2016, the DOJ announced that it had entered into a three-year NPA with PTC China. As a part of the agreement, PTC China agreed to pay a criminal penalty of $14.54 million.
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Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
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Non-prosecution Agreement
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Criminal penalty of $14.54 million. The sanction was coupled with disgorgement of $11.858 million and prejudgment interest of $1.764 million in connection with a SEC cease-and-desist order.
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14,540,000
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0
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Issuer
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U.S.
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United States
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Contract Procurement/Retention
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13,000,000
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Entertainment, Gifts, Travel
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Sales Agent/Consultant
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Not stated.
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China
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No
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No