SEC v. Veraz Networks, Inc. (N.D. Cal. 2010)

• Case Name
• SEC v. Veraz Networks, Inc. (N.D. Cal. 2010)

• Date Filed
• 09/20/2010

• Enforcement Agency
• SEC

• Countries
• China, Vietnam

• Foreign Official
• Officials at government-controlled telecommunications companies in China and Vietnam.

• Date of Conduct
• 2007 to 2008

• Nature of Business
• Veraz Networks, Inc. (“Veraz”) is a Delaware corporation based in California which sells telecommunications products that assist telecommunications service providers in transporting and managing data.

• Influence to be Obtained
• Between 2007 and 2008, a consultant hired by Veraz gave approximately $4,500 in gifts to officials at a telecommunications company controlled by the Chinese government to secure a business deal for Veraz.  A Veraz supervisor approved what he described as the “gift scheme” by email.  In addition, the consultant offered another $35,000 to an official at the telecommunications company to secure a second deal worth $233,000.  The second offer was discovered by Veraz and the deal was cancelled before Veraz received any money for the transaction.
  
  During the same period, a Singapore‑based reseller through which Veraz sold products to a government‑controlled telecommunications company in Vietnam made or offered improper payments to the CEO of the Vietnamese company to obtain business for Veraz.  Veraz also approved and reimbursed this reseller for questionable gifts and entertainment expenses related to the Vietnamese telecommunications company.

• Enforcement
• On September 29, 2010, the SEC filed a settled enforcement action against Veraz, charging Veraz with violating the books and records and internal controls provisions of the FCPA by failing to accurately record the improper payments on its books and records and failing to devise and maintain a system of effective internal controls to prevent such payments.  Without admitting or denying the allegations, Veraz consented to the entry of a final judgment permanently enjoining Veraz from future similar violations and requiring Veraz to pay a penalty of $300,000.

• Amount of the Value
• At least $40,500.

• Amount of Business Related to Payment
• At least $233,000.

• Intermediary
• Reseller and consultant.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 300,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 300,000

Veraz Networks, Inc.

• Citation
• SEC v. Veraz Network, Inc., No. 10-cv-2849 (N.D. Cal. 2010).

• Date Filed
• 09/20/2010

• Filed Under Seal
• No

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

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States