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In the Matter of SAP SE

 
:
SAP SE
:
SEC Civil
:
February 1, 2016
:
In the Matter of SAP SE
:
In the Matter of SAP SE, Admin. Pro. File. No. 3-17080 (2016)
:
The SEC declined to impose a civil penalty and only ordered SAP to pay disgorgement plus prejudgment interest.
:
Computer & Information Technologies-Software
:
Panama
:
2009; 2010; 2011; 2012; 2013
:
Senior government officials of the Republic of Panama.
:
SAP SE is an internationally recognized technology solutions provider headquartered in Waldorf, Germany with operations in over 180 countries. SAP maintains American Depository Shares that are registered with the SEC and listed on the New York Stock Exchange. Vicente Garcia is a U.S. citizen who was a Vice President of Global and Strategic Accounts SAP and was responsible for SAP’s sales in Latin America.

According to the SEC, between June 2009 and November 2013, Garcia and others planned and executed a scheme to bribe three senior officials of the Panamanian government in exchange for the sale of SAP solutions valued at several million dollars to the Panamanian government. The SEC’s cease-and-desist order asserts that Garcia and others paid bribes to one official worth $145,000 and promised to pay bribes to the two other officials in the future.

The SEC asserts that Garcia was able to accomplish the bribery scheme by working through SAP’s worldwide partners. According to the SEC, SAP executes the majority of its sales with local corporate partners whereby SAP agrees to sell certain products to a partner for resale to a separate end-user. In Panama, the SEC claims that Garcia was able to sell software to a local partner at a discount of 82 percent for purposes of reselling the solutions to the Panamanian government, generating a slush fund which enabled Garcia and his accomplices to bribe foreign officials and receive kickbacks of their own. In total, the SEC claims that, as a result of Garcia’s alleged scheme, SAP secured four contracts from the Panamanian government which generated $3.7 million in profits.

According to the SEC, Garcia’s conduct caused SAP to violate the FCPA’s books-and-records and internal controls provisions. The SEC noted that SAP’s procedures for approving discounts to local partners were flawed, concluding that it allowed wide latitude for the application of discounts without verifying employees’ explanations of why such discounts were necessary. Pursuant to the cease-and-desist order, SAP agreed to disgorge the proceeds of the illicit transactions and pay prejudgment interest.
:
Books and records (Issuer), Internal controls (Issuer)
:
Cease and Desist
:
$3,700,000, representing all ill-gotten gains received in connection with the bribery scheme as well as pre-judgment interest.
:
3,700,000
:
0
:
Issuer
:
Foreign
:
Germany
:
3,700,000
:
Cash, Wire/check
:
Sales Agent/Consultant, Subcontractor
:
145,000
:
Panama
:
No
:
Yes