A&O Shearman FCPA Digest | In the Matter of Vicente E. Garcia (2015)<br /> In the Matter of SAP SE (2016)

Source Documents

Nature of Business
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 under Section 12(b) of the Securities Act of 1933 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 at SAP and was responsible for SAP’s sales in Latin America.

Influence to be Obtained
According to the SEC, between June 2009 and November 2013, Garcia and others planned and executed a scheme to bribe three senior government officials from the Panamanian government in exchange for the sale of SAP solutions—valued at $3.7 million—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.

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 partner at a discount of 82% 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.

According to the SEC, Garcia’s conduct caused SAP to violate the FCPA’s books-and-records and internal controls provisions. The SEC alleged that SAP’s procedures for approving discounts to local partners were flawed, claiming that SAP allowed wide latitude for the application of discounts without verifying employees’ explanations of why such discounts were necessary.

Enforcement
On August 12, 2015, the SEC announced that it settled its charges against Garcia for violating the FCPA’s anti-bribery and internal controls provisions. Specifically, the cease-and-desist order commented that Garcia knowingly circumvented SAP’s internal controls and was later asked to resign by SAP as the result of his conduct at the company. In total, Garcia was required to pay $85,965 in disgorgement and $6,430 in prejudgment interest—totaling $92,395 in sanctions.

On February 1, 2016, the SEC separately announced that it had resolved its FCPA enforcement action against SAP for violations of the FCPA’s books-and-records and internal controls provisions. According to the Commission’s cease-and-desist order, SAP would be required to disgorge $3.7 million in profits

Citation
In the Matter of Vicente E. Garcia, Admin. Proc. File No. 3-16750 (Aug. 12, 2015);