In the Matter of PTC Inc. (2016)
In the Matter of Yu Kai Yuan (2016)

• Case Name
• In the Matter of PTC Inc. (2016)
  In the Matter of Yu Kai Yuan (2016)

• Date Filed
• 02/16/2016

• Enforcement Agency
• SEC

• Countries
• China

• Foreign Official
• Employees of Chinese state-owned entities.

• Date of Conduct
• 2006 to 2011

• Nature of Business
• PTC Inc. (formerly Parametric Technology Company) is a Massachusetts corporation with its headquarters in Needham, Massachusetts.  PTS designs, manufactures, and sells Product Lifecycle Management Software (i.e., software that manages a company’s products from design through manufacturing and distribution) and maintains operations in the Americas, Europe, and Asia Pacific, including China.  PTC’s stock is registered with the U.S. Securities and Exchange Commission and is listed on NASDAQ. 
  
  Yu Kai Yuan is a Chinese citizen who resides in Shanghai, China.  From 1996 until 2011, Yuan was employed by PTC as a sales executive at PTC’s Chinese subsidiaries, Parametric Technology (Shanghai) Software Company Ltd. and Parametric Technology (Hong Kong) Ltd. (collectively “PTC China”).

• Influence to be Obtained
• According to the SEC, from 2006 to at least 2011, PTC China provided improper payments of almost $1.5 million to customers who were employed at Chinese state-owned entities to obtain or retain business.  The SEC alleged that PTC China made the allegedly 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. The SEC alleged that PTC obtained approximately $11.8 million in illicit profits from sales contracts with state-owned entities whose officials participated on these trips.  

• Enforcement
• On February 16, 2016, the SEC announced a settlement with PTC through an administrative proceeding.  The SEC order found that PTC violated the FCPA’s anti-bribery, books-and-records, and internal controls provisions.  PTC agreed to disgorge $11,858,000 in ill-gotten gains and pay $1,764,000 in prejudgment interest.  PTC was able to forego a civil penalty as a result of the $14.54 million sanction it paid in connection with a parallel DOJ criminal enforcement action.

• Amount of the Value
• Approximately $1.5 million.

• Amount of Business Related to Payment
• Approximately $11.8 million.

• Intermediary
• Chinese Subsidiaries; Third-Party Business Partners.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 13,622,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 28,162,000

• Related Enforcement Actions
• United States v. Parametric Technology (Shanghai) Software Co. Ltd. and Parametric Technology (Hong Kong) Limited (2016)
  

PTC Inc.

• Citation
• In the Matter of PTC Inc., Admin. Proc. File No. 3-17118 (Feb. 16, 2016);

• Date Filed
• 02/16/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Anti-Bribery
  • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States

Yu Kai Yuan 

• Citation
• In the Matter of Yu Kai Yuan, (February 2016).

• Date Filed
• 02/16/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Deferred Prosecution Agreement

• Defendant Jurisdictional Basis
• Agent of Issuer

• Defendant's Citizenship
• China