In the Matter of Koninklijke Philips Electronics N.V. (2013)

• Case Name
• In the Matter of Koninklijke Philips Electronics N.V. (2013)

• Date Filed
• 04/05/2013

• Enforcement Agency
• SEC

• Countries
• Poland

• Foreign Official
• Public officials of various Polish healthcare facilities

• Date of Conduct
• 1999 to 2007

• Nature of Business
• Koninklijke Philips Electronics N.V. is a Netherlands-based parent of numerous companies that manufacture and supply goods and services in the healthcare, consumer lifestyle, and lighting sectors.  Since 1999, Philips has participated in public tenders to sell medical equipment to Polish healthcare facilities through its Polish subsidiary, Philips Polska sp. z o.o. (“Philips Poland”).

• Influence to be Obtained
• According to the findings in the cease-and-desist order issued by the SEC (which Philips did not admit or deny), employees of Philips Poland allegedly made improper payments from 1999 through 2007 to public officials of Polish healthcare facilities, including hospital directors, to increase the likelihood that Philips would be awarded tenders for the purchase of medical equipment.  Philips would submit the technical specifications of its medical equipment to officials drafting the tenders, who would incorporate these specifications into the contracts, greatly increasing Philips’ chances of winning.  Certain officials involved in these arrangements also decided to whom to award the tenders and received the improper payments when Philips won the tenders.  The payments were falsely characterized and accounted for as legitimate expenses and were at times supported by false documentation created by employees or third-parties.

• Enforcement
• In December 2009, after the Prosecutor’s Office in Poznan, Poland, indicted three former employees for allegedly violating laws related to public tenders for the purchase of medical equipment, Philips conducted an internal investigation and self-reported its findings to the SEC and DOJ in 2010. 
   
  On April 5, 2013, the SEC filed a cease-and-desist order against Philips, pursuant to which Philips agreed to pay $3,120,597 in disgorgement and $1,394,581 in prejudgment interest relating to the violations in Poland.  The SEC did not impose a civil penalty, based upon Philips’ cooperation in the SEC investigation and related enforcement action.
   

• Amount of the Value
• Not Stated

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Third-party Agent.

• Citizenship of Parent Entity
• Netherlands

• Total Sanction
• $ 4,515,178

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 4,515,178

Koninklijke Philips Electronics N.V.

• Citation
• In the Matter of Koninklijke Philips Elecs. N.V., Admin. Proc. File No. 3-15265 (Apr. 5, 2013).

• Date Filed
• 04/05/2013

• Filed Under Seal
• No

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

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• Netherlands