Moog Inc., a manufacturer of components for military and aerospace use, settled charges of violating the Foreign Corrupt Practices Act (FCPA). The global leader in motion control systems agreed to pay a civil penalty of $1.1 million. This resolution comes in response to charges related to illicit payments made by its subsidiary, Moog Motion Controls Private Limited, located in India.
Background of the Case
The SEC’s investigation revealed that from 2020 to 2022, employees at Moog Motion Controls engaged in a series of corrupt practices. Specifically, they paid bribes to various Indian officials to secure business advantages, utilizing multiple schemes to disguise these improper payments. These tactics included funneling payments through third-party agents and distributors, which served to obscure the direct nature of the bribes.
The employees were found to have offered cash incentives to Indian officials with the intent of manipulating public tenders, thereby favoring Moog’s products over those of competitors.
SEC Findings
Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit, emphasized the importance of robust compliance and internal controls when operating in international markets. “The SEC’s action against Moog highlights the need for issuers operating internationally to have appropriate compliance and internal accounting controls over third parties and third-party payments, as weaknesses in those systems heighten corruption risk.”
Resolution Terms
Without admitting or denying the findings, Moog consented to the SEC’s order, which requires the company to cease and desist from future violations. Moog agreed to pay nearly $600,000 in disgorgement and prejudgment interest.
