Westport Fuel Systems, Inc., a Canadian corporation with its headquarters in Vancouver, Canada, creates and constructs cleans fuel systems. Westport’s common stock is registered with the SEC. Westport has many subsidiaries, one of which is a Hong Kong entity that owns shares in Westport’s Chinese joint venture.
Nancy Gougarty, a United States citizen, was the Chief Executive Officer and member of Westport’s board of directors from July 2016 through January 2019.
According to the SEC, Westport and Gougarty, as well as others, carried out a scheme to bribe a Chinese government official to acquire business and a cash dividend payment from Westport’s Chinese joint venture. Specifically, the SEC maintains that Westport, through Gougarty and others, attempted to convey value to the Chinese foreign government official by moving low-valued shares in the joint venture to a private equity firm in which the official had an interest. The SEC believes Westport hoped this action would result in $3.5 million windfall dividend from the joint venture and that Westport would then be able to execute a supply agreement with the joint venture.
Additionally, the SEC alleges that Gougarty did not implement appropriate measures for internal accounting purposes, that she intentionally skirted around Westport’s existing controls, and that she made false representations in an attachment to Form 40-F.