Smith & Wesson paying $2M to settle SEC charges
WASHINGTON (AP) — Smith & Wesson has agreed to pay $2 million to settle civil charges of bribing government officials in Pakistan, Indonesia and other countries to win military and police business.
The Securities and Exchange Commission announced the settlement Monday with the firearms maker, which fired its entire international sales staff after the alleged violations came to light. Smith & Wesson Holding Corp., based in Springfield, Massachusetts, neither admitted nor denied wrongdoing.
As the company pushed to break into new foreign markets from 2007 to 2010, its international sales staff made a concerted effort to get new business by offering or making illegal payments to government officials, the SEC said.
Smith & Wesson President and CEO James Debney said in a statement the company is pleased to have resolved the matter.
The SEC accused the company of violations of the Foreign Corrupt Practices Act, which prohibits bribery of foreign government officials or company executives to secure or retain business.
The agency said Smith & Wesson hired a third-party agent in Pakistan in 2008 to help the company secure a deal to sell firearms to a police department. Company officials authorized the agent to give guns worth more than $11,000 as gifts to Pakistani police officials, in addition to cash payments, the SEC said. The company made $107,852 on the resulting contract to sell 548 pistols to the police department.
That was the only contract at issue that was completed before the violations were discovered, according to the SEC.
Smith & Wesson agreed to pay $107,852 in restitution for the contract plus $21,040 in interest, in addition to a $1.9 million penalty.
The company makes guns for hunters, law enforcement and military agencies, and personal protection.