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SEC v. Maxwell Technologies, Inc.

 
:
Maxwell Technologies, Inc.
:
SEC Civil
:
January 31, 2011
:
SEC v. Maxwell Technologies, Inc.
:
SEC v. Maxwell Technologies, Inc., 1:11-cv-00258 (D.D.C. 2010)
:
Electrical/Electronics
:
China
:
2002; 2003; 2004; 2005; 2006; 2007; 2008; 2009
:
Officials of Chinese state-owned entities
:
Maxwell Technologies, Inc.'s wholly-owned Swiss subsidiary, Maxwell S.A., allegedly engaged a Chinese agent to market and sell Maxwell's high voltage capacitors to several Chinese state-owned entities. From 2002 through May 2009, Maxwell SA is alleged to have paid over $2.5 million to its Chinese agent to secure sales contracts for its high voltage capacitors. As a result, according to the SEC the subsidiary was awarded contracts that generated more than $15 million in revenues and $5.6 million in profits for Maxwell.

The agent allegedly accomplished these payments by adding 20% to the invoice price of the equipment and distributing the extra amount to officials at the state-owned entities upon receipt. Maxwell's U.S. management allegedly discovered the bribery scheme and knowingly perpetuated it, resulting in a steady increase in sales obtained through bribery. According to the government's complaint, Maxwell purportedly mischaracterized the bribes as sales-commissions in its books and records and reclassified the kickbacks for current and prior periods as a reduction in revenue in its Form 10-Qs.
:
Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
:
Securities Fraud
:
Civil Settlement, Disgorgement, Injunction/Cease and desist, Prejudgment Interest
:
$5,654,576 in disgorgement and $696,314 in prejudgment interest.
:
6,350,890
:
0
:
Issuer
:
U.S.
:
United States
:
Contract Procurement/Retention
:
15,000,000
:
Sales Agent/Consultant
:
15,000,000
:
China
:
No
:
Yes