SEC v. GE InVision, Inc. (N.D. Cal. 2005)

• Case Name
• SEC v. GE InVision, Inc. (N.D. Cal. 2005)

• Date Filed
• 02/14/2005

• Enforcement Agency
• SEC

• Countries
• Thailand, China, Philippines

• Foreign Official
• Not Stated

• Date of Conduct
• 2001 to 2004

• Nature of Business
• Sales of explosives detection products by InVision Technologies, Inc. (“InVision”), a U.S. corporation.

• Influence to be Obtained
• Payments were made by InVision’s sales agents and distributors to foreign officials to secure or retain business for InVision.  The DOJ found that there was a “high probability” that senior employees at InVision were aware of the payments, but took no action to determine their legality.

• Enforcement
• InVision disclosed that it was the subject of DOJ and SEC investigations in August 2004.  In December 2004, the DOJ and InVision entered into a non‑prosecution agreement whereby InVision agreed to certain conditions in exchange for a promise from the government that InVision will not be prosecuted for these violations.  If InVision fails to comply with any of the terms of the agreement for a period of two years, the government will be free to prosecute the company for these violations.  Among other things, InVision agreed to pay a fine of $800,000, accept responsibility for the misconduct, continue to cooperate with the DOJ, and adopt an FCPA compliance program as well as a set of internal controls designed to prevent future violations.  Without admitting or denying the claims brought against it by the SEC, on February 14, 2005, InVision settled those claims and agreed to turn over $589,000 of ill‑gotten profits, and pay a fine of $500,000.  This case represents one of the few FCPA inquiries that involve distributors, rather than traditional FCPA investigations that focus on sales representatives or consultants to the company.  Sales representatives and consultants are typically considered intermediaries of the company that is the subject of an investigation and the company is therefore deemed to be fully liable for their actions.  In contrast, distributors purchase goods from manufacturers, take possession and title, and then offer the product for re‑sale in their own name and at their own price.  Accordingly, companies often do not view distributors as agents of the company for purposes of regulatory compliance.

• Amount of the Value
• More than $95,000.

• Amount of Business Related to Payment
• More than $589,000.

• Intermediary
• Not Stated

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 1,117,703

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 1,917,703

• Related Enforcement Actions
• In re InVision Technologies, Inc. (2005)
  SEC v. David M. Pillor (N.D. Cal. 2006)
  

GE InVision, Inc. 

• Citation
• SEC v. GE InVision, Inc., No. 3:05-cv-00660 (N.D. Cal. 2005).

• Date Filed
• 02/14/2005

• Filed Under Seal
• No

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

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States