In re WESTPORT FUEL

 
 
 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 87138 / September 27, 2019 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-19543 
 
 
In the Matter of 
 
WESTPORT FUEL 
SYSTEMS, INC. and 
NANCY GOUGARTY,  
 
 
Respondents. 
 
 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER 
  
I. 
 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-
and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 
Exchange Act of 1934 (“Exchange Act”) against Westport Fuel Systems, Inc. (“Westport”) and 
Nancy Gougarty (“Gougarty”) (collectively, “Respondents”). 
II. 
In anticipation of the institution of these proceedings, Respondents have submitted Offers 
of Settlement (“Offers”) which the Commission has determined to accept.  Solely for the purpose 
of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 
which the Commission is a party, and without admitting or denying the findings herein, except as 
to admitting the Commission’s jurisdiction over them and the subject matter of these 
proceedings, Respondents consent to the entry of this Order Instituting Cease-and-Desist 
Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, 
and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
III. 
 
On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that: 
                                                
1
   The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding 
on any other person or entity in this or any other proceeding. 

 2 
Summary 
 
1. This matter concerns violations of the anti-bribery, books and records, and internal 
controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by Westport Fuel Systems, Inc., 
a Canadian clean fuel technology company headquartered in Vancouver, Canada, and its former 
Chief Executive Officer, Nancy Gougarty.   
2. Beginning no later than 2016, Westport, through Gougarty and others, engaged in a 
scheme to bribe a Chinese foreign government official (“Government Official”) to obtain business 
and a cash dividend payment from Westport’s Chinese joint venture (“JV” or “joint venture”).  JV’s 
largest shareholder during the relevant period was a Chinese state-owned entity (“SOE-1”).  The 
Government Official held a senior position at SOE-1.  At the request of SOE-1, Westport, acting 
through Gougarty and others, agreed to, and did, transfer at a low valuation a portion of Westport’s 
shares in the joint venture to a Chinese private equity fund in which Gougarty and others had been 
informed that the Government Official held a financial interest.  In exchange, Westport, through 
Gougarty and others, believed that the Government Official would use his influence to cause the 
JV to authorize an increased dividend payment of $3.5 million to Westport and to execute a 
framework supply agreement between the JV and Westport. 
3. As a result of the bribery scheme, Westport violated the books and records 
provisions of the FCPA by maintaining false books and records that concealed the identity of the 
true counterparty to the share transfer.  Westport also failed to devise and maintain a sufficient 
system of internal accounting controls, and Gougarty was a cause of this violation.  Gougarty 
knowingly circumvented the internal accounting controls that Westport did maintain, by, for 
example, concealing the role of the private equity fund and by failing to require that due diligence 
be conducted on the fund.  Lastly, Gougarty signed a certification regarding internal controls that 
was attached to Westport’s Form 40-F for the year ending December 31, 2016.  Gougarty’s 
representations in that certification were false, as described below.   
Respondents 
4. Westport Fuel Systems, Inc. (“Westport”) (NASDAQ: WPRT) is a Canadian 
corporation headquartered in Vancouver, Canada, that designs and manufactures clean fuel 
systems.
 
 Westport’s common stock is registered under Section 12(b) of the Exchange Act, and it 
also lists its securities on the Toronto Stock Exchange.  Westport’s subsidiaries include a Hong 
Kong entity that owns shares in Westport’s Chinese joint venture, JV.  Prior to the share transfer in 
August 2016, the owners of the JV were Westport’s wholly owned subsidiary in Hong Kong, SOE-
1 and a privately held Hong Kong conglomerate. 
5. Nancy Gougarty (age 64) is a United States citizen whose principal residence is 
in Leesville, South Carolina.  Gougarty joined Westport in July 2013 as the Chief Operating 
Officer.  She was the Chief Executive Officer and a member of Westport’s board of directors 
from July 2016 until January 2019, when she voluntarily retired.   
Facts 
6. In March of 2013, at the direction of the Government Official, SOE-1 proposed 
taking the JV public in China through an initial public offering (“IPO”).  The JV’s manager, 
appointed by SOE-1, falsely represented to Westport that Chinese law required SOE-1 to have a 
majority interest in the joint venture to qualify for an IPO.  Accordingly, the manager of the JV 

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advised Westport that a preliminary step in the IPO process would involve restructuring the joint 
venture so that a portion of the shares held by Westport and a privately held Hong Kong 
conglomerate would have to be transferred to SOE-1 and a Chinese private equity fund (in which 
the Government Official held a financial interest).  Although the shares were transferred to the 
private equity fund, the contemplated IPO never took place. 
 
7. Once the proposed restructuring was complete, SOE-1 would own 51% of JV’s 
shares, Westport would own 23.33% through its Hong Kong subsidiary, the Hong Kong 
conglomerate would own 16.67%, and the Chinese private equity fund would own 9%.  On 
February 11, 2014, the JV board of directors approved the proposed share transfer.  Gougarty, 
Westport’s Chief Operating Officer at the time, led the Westport team in the negotiations with 
SOE-1.   
 
8. In April 2014, Gougarty recruited and hired a Chinese national to head Westport’s 
Asia Pacific regional office.  Gougarty had worked closely with the Asia Pacific general manager 
(“the Asia Pacific GM”) for four years in a different company before hiring him to join her at 
Westport.  Based in Shanghai, the Asia Pacific GM played a central role in the negotiations with 
SOE-1 and the Chinese private equity fund due to his legal training, his native Mandarin language 
skills and his physical proximity to JV and SOE-1 in China.   
 
9. The Asia Pacific GM then joined Gougarty in negotiating the terms of the share 
transfer with the JV’s manager and an SOE-1 executive, who acted on behalf of the Government 
Official.  Based on information that he obtained in his conversations with the JV manager, an 
SOE-1 executive, and an executive at the Hong Kong conglomerate, the Asia Pacific GM 
provided frequent, detailed email updates to Gougarty and other Westport executives.  Gougarty 
worked closely with and supervised the Asia Pacific GM during the negotiations from 
approximately June 2014 until his separation in April 2016. 
 
10. Early in the negotiations, the Asia Pacific GM reported that he was told that the 
Government Official had a significant but undisclosed financial interest in the Chinese private 
equity fund that was to receive the JV shares from Westport and the Hong Kong conglomerate.  
He also reported that it was the Government Official’s personal financial interest, not Chinese 
law, which was motivating the transfer of shares to the private equity fund.  In an email dated 
June 20, 2014, the Asia Pacific GM reported to Gougarty that the Government Official “has [a] 
personal interest in the fund that [SOE-1] tries to bring in.”  In an email dated June 26, 2014, 
addressed to Gougarty and others, the Asia Pacific GM explained that the IPO was for the 
Government Official’s “benefit, all he wants is a discount to the fund where he has interest.”    
 
11. The Government Official’s personal interest became a central part of Westport’s 
negotiation strategy.  Gougarty recommended alternatives that included seeking a supply 
agreement in exchange for a transfer of shares to the private equity fund.  No later than March 
2015, Westport explicitly conditioned the share transfer on obtaining a long-term sales 
agreement.  Having acknowledged Westport’s position of “no component sales contract, no share 
transfer,” Gougarty instructed Westport employees working for her on the transaction in March 
2016 that the component supply agreement was a necessary element to complete the deal.   
 

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12. The negotiations progressed slowly as the Government Official and Westport 
disagreed on the share transfer price, a figure derived from the valuation of the joint venture.  In 
March 2015, after meeting with executives at the private equity fund, the Asia Pacific GM 
reported that he was told that the Government Official was seeking a low valuation in order to 
“make quick and big money” outside the scrutiny of Chinese regulators.  At the same time, 
Westport was seeking to maximize its value in order to alleviate its worsening finances and 
severe need for cash.  However, as oil prices plummeted in 2014 and 2015, increasing the market 
for gasoline-powered car engines and reducing the market for Westport’s alternative fuel 
products, Westport became more willing to accept a lower valuation in order to close the deal 
and obtain the much-needed, albeit smaller, infusion of cash.   
 
13. On June 29, 2015, Westport’s Board of Directors authorized Westport’s 
management to complete the negotiations and execute the share transfer.  Gougarty did not 
disclose to the Board what the Asia Pacific GM had told her about the Government Official’s 
personal financial interest in the private equity fund or that the Government Official had 
requested a discount in the share transfer price.  In fact, approximately nine months before 
obtaining the Board’s approval, Gougarty withheld this information from the Board, deleting a 
sentence in a September 2014 draft letter to the Board prepared by the Asia Pacific GM that 
described the proposed transfer.  If Gougarty had not redacted the sentence, it would have 
reported to the Board that the Government Official had a financial interest in the Chinese private 
equity fund.   
14. By early December 2015, Westport and the Government Official, negotiating 
through SOE-1 and the private equity fund, struck a deal.  They agreed on a valuation of $70 
million for the JV, and Westport agreed to transfer shares to SOE-1 and the private equity fund in 
exchange for a long-term framework supply agreement and a cash dividend of 30% of 
undistributed profits--20% more than what was provided for under the joint venture agreement and 
more than Westport had received in the past.  Westport also agreed, as Gougarty explained earlier 
in November 2015, that the public announcement of the deal would be limited to “talk[ing] about 
the transfer of share[s] to [SOE-1] and [an] unidentified Chinese company.” 
15. In June 2016, Westport issued a revised Code of Conduct, which, like the earlier 
version that had been in effect since 2010, prohibited the payment of bribes to government 
officials, including transfers made indirectly through third parties.  Gougarty reviewed the 2010 
Code of Conduct when she began working at Westport, and she reviewed the new version in June 
2016.  She had also received training regarding the FCPA while working at another company prior 
to joining Westport. 
16. While the Westport Code of Conduct prohibited the use of third parties to funnel 
bribes to government officials and it required that due diligence be conducted when retaining 
third parties to provide goods or services to Westport, both versions of the Code of Conduct were 
silent on the need to conduct due diligence when engaging in a business transaction with a third 
party in which a foreign government official may have a financial interest.  Additionally, 
although Westport required anti-bribery clauses in contracts with vendors, there was no 
requirement that the company use such clauses when engaging in a business transaction such as a 
share transfer with entities that may be related to foreign government officials.   
17.   On August 20, 2016, Gougarty, by then Westport’s CEO, executed the share 
transfer agreements with the Chinese private equity fund and with SOE-1.  That same day, the JV 

 5 
and Westport entered into a framework supply agreement pursuant to which the JV eventually 
would purchase approximately $500,000 of engine components from Westport.  By separate 
resolution, executed on the same day, the JV authorized the distribution of a 30% dividend to all of 
the shareholders. 
18. On September 29, 2016, as reflected in bank records maintained as source 
documents in Westport’s files, the private equity fund wired a payment of approximately $3 
million to Westport’s bank in Vancouver, Canada, from its bank in China through a correspondent 
bank in the United States.  However, even though Westport’s Key Accounting Control 3.1.1 
required the comparison of source documents with journal entries, Westport’s books and records 
accounting for the transaction falsely reflected the identity of the counterparty in the transaction as 
SOE-2, an entity related to SOE-1, rather than the true counterparty, the private equity fund.   
19. In October 2016, Westport received approximately $3.5 million, representing the 
increased dividend approved by the JV Board on August 20, 2016, the same day that Westport 
executed the share transfer agreements to the private equity fund and SOE-1.  The $3.5 million 
dividend was credited to Westport’s bank account in Vancouver, Canada, having been sent from a 
bank in China through a correspondent bank in the United States. 
20. On November 9, 2016, Westport furnished its Form 6-K with the Commission 
which, like Westport’s books and records, falsely described the identity of the counterparty in the 
share transfer as SOE-2 instead of the Chinese private equity fund.  Even though Westport’s 
internal accounting Key Controls 6.2.1 and 6.2.2 purported to establish a process to reconcile 
public filings with source documents to provide reasonable assurance with respect to the accuracy 
and consistency of its filings, it failed to follow this process.  As evidenced by her own 
misconduct, Gougarty as CEO failed to discharge her duty on behalf of Westport to devise and 
maintain a sufficient system of internal accounting controls. 
21. On March 31, 2017, Westport filed a Form 40-F, its annual report, for the year 
ending December 31, 2016.  The Management Discussion & Analysis (“MD&A”) and financial 
statements attached to the Form 40-F falsely reported the identity of the counterparty in the share 
transfer as SOE-2 instead of the Chinese private equity fund.  In connection with the filing of the 
Form 40-F, Gougarty executed a certification falsely attesting that Westport had disclosed all 
significant deficiencies and material weaknesses in the design and operation of its internal controls 
to the outside auditors.  However, as Gougarty knew, she had failed to disclose to the outside 
auditors the deficiencies and weaknesses in the internal controls that she had exploited in carrying 
out an unlawful bribery scheme in circumvention of Westport’s anti-bribery policies and its key 
accounting controls. 
Legal Standards and Violations 
 
22. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-
and-desist order upon any person who is violating, has violated, or is about to violate any provision 
of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, 
or would be a cause of the violation, due to an act or omission the person knew or should have 
known would contribute to such violation. 
23. As a result of the conduct described above, Westport and Gougarty violated Section 
30A of the Exchange Act, which prohibits any issuer with a class of securities registered pursuant 

 6 
to Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 
such issuer, in order to obtain or retain business, from corruptly giving or authorizing the giving of, 
anything of value to any foreign official for the purposes of influencing the official or inducing the 
official to act in violation of his or her lawful duties, or to secure any improper advantage, or to 
induce a foreign official to use his influence with a foreign governmental instrumentality to 
influence any act or decision of such government or instrumentality.  
24. As a result of the conduct described above, Westport violated, and Gougarty  
caused Westport’s violation of, Section 13(b)(2)(A) of the Exchange Act, which requires every 
issuer with a class of securities registered pursuant to Exchange Act Section 12 to make and keep 
books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 
transactions and disposition of the assets of the issuer. 
25. As a result of the conduct described above, Westport violated, and Gougarty 
caused Westport’s violation of, Section 13(b)(2)(B) of the Exchange Act which requires every 
issuer with a class of securities registered pursuant to Exchange Act Section 12 to devise and 
maintain a system of internal accounting controls sufficient to provide reasonable assurances that 
(i) transactions are executed in accordance with management’s general or specific authorization; 
(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 
conformity with generally accepted accounting principles or any other criteria applicable to such 
statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 
accordance with management’s general or specific authorization; and (iv) the recorded 
accountability for assets is compared with the existing assets at reasonable intervals and 
appropriate action is taken with respect to any differences. 
 
26. As a result of the conduct described above, Gougarty knowingly violated Section 
13(b)(5) of the Exchange Act, which provides that no person shall knowingly circumvent or 
knowingly fail to implement a system of internal accounting controls or knowingly falsify any 
book, record or account, and Exchange Act Rule 13b2-1, which prohibits persons from directly or 
indirectly falsifying or causing to be falsified any book, record or account.   
 
27. As a result of the conduct described above, Gougarty violated Exchange Act Rule 
13a-14, which requires that a principal executive officer and a principal financial officer must 
certify in each annual report filed or submitted under Section 13(a) of the Exchange Act that he or 
she has reviewed the report and, among other things, disclosed to the issuer’s auditors and the audit 
committee of the issuer’s board of directors, all significant deficiencies and material weaknesses in 
the design or operation of internal control over financial reporting which are reasonably likely to 
adversely affect the issuer’s ability to record, process, summarize and report financial information. 
 
Westport’s Remedial Efforts 
    28.      In determining to accept Westport’s Offer, the Commission considered remedial 
acts undertaken by Westport concerning its anti-corruption and financial reporting compliance 
programs, and its cooperation afforded the Commission staff. 
    29. During the course of the staff’s investigation, Westport enhanced its 
anticorruption and compliance policies and training programs, and its disclosure policies and 

 7 
controls.  Westport enhanced its antibribery and anticorruption controls by adopting revised 
policies that, among other things, establish specific controls for transactions involving foreign 
government officials and entities, mandate due diligence for such transactions, and specifically 
require Westport’s business partners to agree to abide by antibribery laws, including the FCPA.   
   30.   Westport’s cooperation included making foreign witnesses available for testimony 
at the Commission’s Regional Office in Los Angeles and voluntarily producing additional 
requested documents.   
Undertakings 
 
  31.  Westport undertakes to: 
(1) Report to the Commission staff periodically during a two-year term, the 
status of its remediation and implementation of compliance measures, particularly as to 
the areas of due diligence of third-party entities and persons, FCPA training and the 
testing of relevant controls including the collection and analysis of compliance data. 
(2)   During this period, should Westport discover credible evidence, not 
already reported to Commission staff, that questionable or corrupt payments or 
questionable or corrupt transfers of value may have been offered, promised, paid, or 
authorized by Westport, or any entity or person acting on behalf of Westport, or that 
related false books and records have been maintained, Westport shall promptly report 
such conduct to the Commission staff.  
(3) During this two-year period, Westport shall: (1) conduct an initial review 
and submit an initial report and (2) conduct and prepare two follow-up reviews and 
reports, as described below:  
a. Westport shall submit to the Commission staff a written report 
within 180 calendar days of the entry of this Order setting forth a complete 
description of its FCPA and anti-corruption related remediation efforts to date, its 
proposals reasonably designed to improve the policies and procedures of Westport 
for the purpose of compliance with the FCPA and other applicable anticorruption 
laws, and the parameters of the subsequent review (the “Initial Report”).   
b.  The Initial Report shall be transmitted to Ansu N. Banerjee, 
Assistant Regional Director, United States Securities and Exchange Commission, 
444 Flower St., Suite 900, Los Angeles, California 90071.  Westport may extend 
the time period for issuance of the Initial Report with prior written approval of the 
Commission staff.  
c. Westport shall undertake two follow-up reviews, incorporating any 
comments provided by the Commission staff on the previous report, to further 
monitor and assess whether the policies and procedures of Westport are 
reasonably designed to detect and prevent violations of the FCPA and other 
applicable anti-corruption laws (the “Follow-Up Reports”).  

 8 
d. The Follow-up Report shall be completed by no later than 270 
days after the Initial Report.  The second Follow-up Report shall be completed by 
no later than 450 days after the completion of the Initial Report.  Westport may 
extend the time period for issuance of the Follow-up Reports with prior written 
approval of the Commission staff.  
e. The periodic reviews and reports submitted by Westport will likely 
include proprietary, financial, confidential, and competitive business information.  
Public disclosure of the reports could discourage cooperation, impede pending or 
potential government investigations and thus undermine the objectives of the 
reporting requirement.  For these reasons, among others, the reports and the 
contents thereof are intended to remain and shall remain nonpublic, except (a) 
pursuant to court order, (b) as agreed by the parties in writing, (c) to the extent 
that the Commission staff determines in its sole discretion that disclosure would 
be in furtherance of the Commission’s discharge of its duties and responsibilities, 
or (d) is otherwise required by law.  
f. During this two-year period of review, Westport shall provide its 
external auditors with its annual internal audit plan and reports of the results of 
internal audit procedures and its assessment of its FCPA compliance policies and 
procedures.  
g. During the two-year period of review, Westport shall provide 
Commission staff with any written reports or recommendations provided by 
Westport’s external auditors in response to Westport’s annual internal audit plan, 
reports of the results of internal audit procedures, and its assessment of its FCPA 
compliance policies and procedures.  
(4) Certify, in writing, compliance with the undertaking(s) set forth above. 
The certification shall identify the undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance.  The Commission staff may make reasonable requests for 
further evidence of compliance, and Westport agrees to provide such evidence. The 
certification and supporting material shall be submitted to Ansu N. Banerjee, Assistant 
Regional Director, United States Securities and Exchange Commission, 444 Flower St., 
Suite 900, Los Angeles, California 90071 no later than sixty (60) days from the date of 
the completion of the undertakings.  
 
 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondents’ Offers. 

 9 
 Accordingly, it is hereby ORDERED that: 
 A. Pursuant to Section 21C of the Exchange Act, Westport and Gougarty cease and 
desist from committing or causing any violations and any future violations of Sections 30A, 
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act.  
B. Pursuant to Section 21C of the Exchange Act, Gougarty cease and desist from 
committing or causing any violations and any future violations of Section 13(b)(5) of the Exchange 
Act and Rules 13a-14 and 13b2-1 thereunder.  
C.   Westport shall comply with the undertakings enumerated in paragraph 31, above. 
 
D.  Westport shall pay disgorgement of $2,350,000, prejudgment interest of $196,000 
and civil penalties of $1,500,000, to the Securities and Exchange Commission for a total payment 
of $4,046,000 to the Securities and Exchange Commission for transfer to the general fund of the 
United States Treasury, subject to Section 21F(g)(3) of the Exchange Act.  Payment shall be made 
in the following installments:  $2,023,000 within fourteen days of the entry of this Order, and four 
payments of $505,750 each to be made within 90, 180, 270, and 362 days from the entry of this 
Order.  Payments shall be applied first to post order interest, which accrues pursuant to SEC Rule 
of Practice 600 and pursuant to 31 U.S.C. 3717.  Prior to making the final payment set forth herein, 
Westport shall contact the staff of the Commission for the amount due.  If Westport fails to make 
any payment by the date agreed and/or in the amount agreed according to the schedule set forth 
above, all outstanding payments under this Order, including post-order interest, minus any 
payments made, shall become due and payable immediately at the discretion of the staff of the 
Commission without further application to the Commission. 
 E.  Gougarty shall, within 10 days of the entry of this Order, pay a civil money penalty 
of $120,000 to the Securities and Exchange Commission for transfer to the general fund of the 
United States Treasury, subject to Section 21F(g)(3) of the Exchange Act.   
 F. If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 
§ 3717 or SEC Rule of Practice 600.  Payment must be made in one of the following ways:   
(1)  Respondents may transmit payment electronically to the Commission, 
which will provide detailed ACH transfer/Fedwire instructions upon request;  
(2)  Respondents may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
(3)  Respondents may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
Payments by check or money order must be accompanied by a cover letter identifying 
Westport or Gougarty in these proceedings, and the file number of these proceedings.  A copy of 
the cover letter and check or money order must be sent to Charles Cain, Chief, FCPA Unit, 

 10 
Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, 
DC 20549.   
 G.   Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 
treated as penalties paid to the government for all purposes, including all tax purposes.  To 
preserve the deterrent effect of the civil penalty, Respondents agree that in any Related Investor 
Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of 
any award of compensatory damages by the amount of any part of Respondents’ payment of a civil 
penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 
Penalty Offset, Respondents agree that they shall, within 30 days after entry of a final order 
granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 
the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 
deemed an additional civil penalty and shall not be deemed to change the amount of the civil 
penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 
means a private damages action brought against Respondents by or on behalf of one or more 
investors based on substantially the same facts as alleged in the Order instituted by the 
Commission in this proceeding. 
 
V. 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Gougarty, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Gougarty under this Order or any other judgment, order, consent order, decree or 
settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Gougarty of the federal securities laws or any regulation or order issued under such laws, as set 
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 
 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 87138 / September 27, 2019 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-19543 

 

 

In the Matter of 

 

WESTPORT FUEL 

SYSTEMS, INC. and 

NANCY GOUGARTY,  

 

 

Respondents. 

 

 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER 

  

I. 

 The Securities and Exchange Commission (“Commission”) deems it appropriate that cease-

and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”) against Westport Fuel Systems, Inc. (“Westport”) and 

Nancy Gougarty (“Gougarty”) (collectively, “Respondents”). 

II. 

In anticipation of the institution of these proceedings, Respondents have submitted Offers 

of Settlement (“Offers”) which the Commission has determined to accept.  Solely for the purpose 

of these proceedings and any other proceedings brought by or on behalf of the Commission, or to 

which the Commission is a party, and without admitting or denying the findings herein, except as 

to admitting the Commission’s jurisdiction over them and the subject matter of these 

proceedings, Respondents consent to the entry of this Order Instituting Cease-and-Desist 

Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, 

and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

III. 

 

On the basis of this Order and Respondents’ Offers, the Commission finds
1
 that: 

                                                
1   The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding 

on any other person or entity in this or any other proceeding. 



 2 

Summary 

 

1. This matter concerns violations of the anti-bribery, books and records, and internal 

controls provisions of the Foreign Corrupt Practices Act (“FCPA”) by Westport Fuel Systems, Inc., 

a Canadian clean fuel technology company headquartered in Vancouver, Canada, and its former 

Chief Executive Officer, Nancy Gougarty.   

2. Beginning no later than 2016, Westport, through Gougarty and others, engaged in a 

scheme to bribe a Chinese foreign government official (“Government Official”) to obtain business 

and a cash dividend payment from Westport’s Chinese joint venture (“JV” or “joint venture”).  JV’s 

largest shareholder during the relevant period was a Chinese state-owned entity (“SOE-1”).  The 

Government Official held a senior position at SOE-1.  At the request of SOE-1, Westport, acting 

through Gougarty and others, agreed to, and did, transfer at a low valuation a portion of Westport’s 

shares in the joint venture to a Chinese private equity fund in which Gougarty and others had been 

informed that the Government Official held a financial interest.  In exchange, Westport, through 

Gougarty and others, believed that the Government Official would use his influence to cause the 

JV to authorize an increased dividend payment of $3.5 million to Westport and to execute a 

framework supply agreement between the JV and Westport. 

3. As a result of the bribery scheme, Westport violated the books and records 

provisions of the FCPA by maintaining false books and records that concealed the identity of the 

true counterparty to the share transfer.  Westport also failed to devise and maintain a sufficient 

system of internal accounting controls, and Gougarty was a cause of this violation.  Gougarty 

knowingly circumvented the internal accounting controls that Westport did maintain, by, for 

example, concealing the role of the private equity fund and by failing to require that due diligence 

be conducted on the fund.  Lastly, Gougarty signed a certification regarding internal controls that 

was attached to Westport’s Form 40-F for the year ending December 31, 2016.  Gougarty’s 

representations in that certification were false, as described below.   

Respondents 

4. Westport Fuel Systems, Inc. (“Westport”) (NASDAQ: WPRT) is a Canadian 

corporation headquartered in Vancouver, Canada, that designs and manufactures clean fuel 

systems.  Westport’s common stock is registered under Section 12(b) of the Exchange Act, and it 

also lists its securities on the Toronto Stock Exchange.  Westport’s subsidiaries include a Hong 

Kong entity that owns shares in Westport’s Chinese joint venture, JV.  Prior to the share transfer in 

August 2016, the owners of the JV were Westport’s wholly owned subsidiary in Hong Kong, SOE-

1 and a privately held Hong Kong conglomerate. 

5. Nancy Gougarty (age 64) is a United States citizen whose principal residence is 

in Leesville, South Carolina.  Gougarty joined Westport in July 2013 as the Chief Operating 

Officer.  She was the Chief Executive Officer and a member of Westport’s board of directors 

from July 2016 until January 2019, when she voluntarily retired.   

Facts 

6. In March of 2013, at the direction of the Government Official, SOE-1 proposed 

taking the JV public in China through an initial public offering (“IPO”).  The JV’s manager, 

appointed by SOE-1, falsely represented to Westport that Chinese law required SOE-1 to have a 

majority interest in the joint venture to qualify for an IPO.  Accordingly, the manager of the JV 



 3 

advised Westport that a preliminary step in the IPO process would involve restructuring the joint 

venture so that a portion of the shares held by Westport and a privately held Hong Kong 

conglomerate would have to be transferred to SOE-1 and a Chinese private equity fund (in which 

the Government Official held a financial interest).  Although the shares were transferred to the 

private equity fund, the contemplated IPO never took place. 

 

7. Once the proposed restructuring was complete, SOE-1 would own 51% of JV’s 

shares, Westport would own 23.33% through its Hong Kong subsidiary, the Hong Kong 

conglomerate would own 16.67%, and the Chinese private equity fund would own 9%.  On 

February 11, 2014, the JV board of directors approved the proposed share transfer.  Gougarty, 

Westport’s Chief Operating Officer at the time, led the Westport team in the negotiations with 

SOE-1.   

 

8. In April 2014, Gougarty recruited and hired a Chinese national to head Westport’s 

Asia Pacific regional office.  Gougarty had worked closely with the Asia Pacific general manager 

(“the Asia Pacific GM”) for four years in a different company before hiring him to join her at 

Westport.  Based in Shanghai, the Asia Pacific GM played a central role in the negotiations with 

SOE-1 and the Chinese private equity fund due to his legal training, his native Mandarin language 

skills and his physical proximity to JV and SOE-1 in China.   

 

9. The Asia Pacific GM then joined Gougarty in negotiating the terms of the share 

transfer with the JV’s manager and an SOE-1 executive, who acted on behalf of the Government 

Official.  Based on information that he obtained in his conversations with the JV manager, an 

SOE-1 executive, and an executive at the Hong Kong conglomerate, the Asia Pacific GM 

provided frequent, detailed email updates to Gougarty and other Westport executives.  Gougarty 

worked closely with and supervised the Asia Pacific GM during the negotiations from 

approximately June 2014 until his separation in April 2016. 

 

10. Early in the negotiations, the Asia Pacific GM reported that he was told that the 

Government Official had a significant but undisclosed financial interest in the Chinese private 

equity fund that was to receive the JV shares from Westport and the Hong Kong conglomerate.  

He also reported that it was the Government Official’s personal financial interest, not Chinese 

law, which was motivating the transfer of shares to the private equity fund.  In an email dated 

June 20, 2014, the Asia Pacific GM reported to Gougarty that the Government Official “has [a] 

personal interest in the fund that [SOE-1] tries to bring in.”  In an email dated June 26, 2014, 

addressed to Gougarty and others, the Asia Pacific GM explained that the IPO was for the 

Government Official’s “benefit, all he wants is a discount to the fund where he has interest.”    

 

11. The Government Official’s personal interest became a central part of Westport’s 

negotiation strategy.  Gougarty recommended alternatives that included seeking a supply 

agreement in exchange for a transfer of shares to the private equity fund.  No later than March 

2015, Westport explicitly conditioned the share transfer on obtaining a long-term sales 

agreement.  Having acknowledged Westport’s position of “no component sales contract, no share 

transfer,” Gougarty instructed Westport employees working for her on the transaction in March 

2016 that the component supply agreement was a necessary element to complete the deal.   

 



 4 

12. The negotiations progressed slowly as the Government Official and Westport 

disagreed on the share transfer price, a figure derived from the valuation of the joint venture.  In 

March 2015, after meeting with executives at the private equity fund, the Asia Pacific GM 

reported that he was told that the Government Official was seeking a low valuation in order to 

“make quick and big money” outside the scrutiny of Chinese regulators.  At the same time, 

Westport was seeking to maximize its value in order to alleviate its worsening finances and 

severe need for cash.  However, as oil prices plummeted in 2014 and 2015, increasing the market 

for gasoline-powered car engines and reducing the market for Westport’s alternative fuel 

products, Westport became more willing to accept a lower valuation in order to close the deal 

and obtain the much-needed, albeit smaller, infusion of cash.   

 

13. On June 29, 2015, Westport’s Board of Directors authorized Westport’s 

management to complete the negotiations and execute the share transfer.  Gougarty did not 

disclose to the Board what the Asia Pacific GM had told her about the Government Official’s 

personal financial interest in the private equity fund or that the Government Official had 

requested a discount in the share transfer price.  In fact, approximately nine months before 

obtaining the Board’s approval, Gougarty withheld this information from the Board, deleting a 

sentence in a September 2014 draft letter to the Board prepared by the Asia Pacific GM that 

described the proposed transfer.  If Gougarty had not redacted the sentence, it would have 

reported to the Board that the Government Official had a financial interest in the Chinese private 

equity fund.   

14. By early December 2015, Westport and the Government Official, negotiating 

through SOE-1 and the private equity fund, struck a deal.  They agreed on a valuation of $70 

million for the JV, and Westport agreed to transfer shares to SOE-1 and the private equity fund in 

exchange for a long-term framework supply agreement and a cash dividend of 30% of 

undistributed profits--20% more than what was provided for under the joint venture agreement and 

more than Westport had received in the past.  Westport also agreed, as Gougarty explained earlier 

in November 2015, that the public announcement of the deal would be limited to “talk[ing] about 

the transfer of share[s] to [SOE-1] and [an] unidentified Chinese company.” 

15. In June 2016, Westport issued a revised Code of Conduct, which, like the earlier 

version that had been in effect since 2010, prohibited the payment of bribes to government 

officials, including transfers made indirectly through third parties.  Gougarty reviewed the 2010 

Code of Conduct when she began working at Westport, and she reviewed the new version in June 

2016.  She had also received training regarding the FCPA while working at another company prior 

to joining Westport. 

16. While the Westport Code of Conduct prohibited the use of third parties to funnel 

bribes to government officials and it required that due diligence be conducted when retaining 

third parties to provide goods or services to Westport, both versions of the Code of Conduct were 

silent on the need to conduct due diligence when engaging in a business transaction with a third 

party in which a foreign government official may have a financial interest.  Additionally, 

although Westport required anti-bribery clauses in contracts with vendors, there was no 

requirement that the company use such clauses when engaging in a business transaction such as a 

share transfer with entities that may be related to foreign government officials.   

17.   On August 20, 2016, Gougarty, by then Westport’s CEO, executed the share 

transfer agreements with the Chinese private equity fund and with SOE-1.  That same day, the JV 



 5 

and Westport entered into a framework supply agreement pursuant to which the JV eventually 

would purchase approximately $500,000 of engine components from Westport.  By separate 

resolution, executed on the same day, the JV authorized the distribution of a 30% dividend to all of 

the shareholders. 

18. On September 29, 2016, as reflected in bank records maintained as source 

documents in Westport’s files, the private equity fund wired a payment of approximately $3 

million to Westport’s bank in Vancouver, Canada, from its bank in China through a correspondent 

bank in the United States.  However, even though Westport’s Key Accounting Control 3.1.1 

required the comparison of source documents with journal entries, Westport’s books and records 

accounting for the transaction falsely reflected the identity of the counterparty in the transaction as 

SOE-2, an entity related to SOE-1, rather than the true counterparty, the private equity fund.   

19. In October 2016, Westport received approximately $3.5 million, representing the 

increased dividend approved by the JV Board on August 20, 2016, the same day that Westport 

executed the share transfer agreements to the private equity fund and SOE-1.  The $3.5 million 

dividend was credited to Westport’s bank account in Vancouver, Canada, having been sent from a 

bank in China through a correspondent bank in the United States. 

20. On November 9, 2016, Westport furnished its Form 6-K with the Commission 

which, like Westport’s books and records, falsely described the identity of the counterparty in the 

share transfer as SOE-2 instead of the Chinese private equity fund.  Even though Westport’s 

internal accounting Key Controls 6.2.1 and 6.2.2 purported to establish a process to reconcile 

public filings with source documents to provide reasonable assurance with respect to the accuracy 

and consistency of its filings, it failed to follow this process.  As evidenced by her own 

misconduct, Gougarty as CEO failed to discharge her duty on behalf of Westport to devise and 

maintain a sufficient system of internal accounting controls. 

21. On March 31, 2017, Westport filed a Form 40-F, its annual report, for the year 

ending December 31, 2016.  The Management Discussion & Analysis (“MD&A”) and financial 

statements attached to the Form 40-F falsely reported the identity of the counterparty in the share 

transfer as SOE-2 instead of the Chinese private equity fund.  In connection with the filing of the 

Form 40-F, Gougarty executed a certification falsely attesting that Westport had disclosed all 

significant deficiencies and material weaknesses in the design and operation of its internal controls 

to the outside auditors.  However, as Gougarty knew, she had failed to disclose to the outside 

auditors the deficiencies and weaknesses in the internal controls that she had exploited in carrying 

out an unlawful bribery scheme in circumvention of Westport’s anti-bribery policies and its key 

accounting controls. 

Legal Standards and Violations 

 

22. Under Section 21C(a) of the Exchange Act, the Commission may impose a cease-

and-desist order upon any person who is violating, has violated, or is about to violate any provision 

of the Exchange Act or any rule or regulation thereunder, and upon any other person that is, was, 

or would be a cause of the violation, due to an act or omission the person knew or should have 

known would contribute to such violation. 

23. As a result of the conduct described above, Westport and Gougarty violated Section 

30A of the Exchange Act, which prohibits any issuer with a class of securities registered pursuant 



 6 

to Section 12 of the Exchange Act, or any officer, director, employee, or agent acting on behalf of 

such issuer, in order to obtain or retain business, from corruptly giving or authorizing the giving of, 

anything of value to any foreign official for the purposes of influencing the official or inducing the 

official to act in violation of his or her lawful duties, or to secure any improper advantage, or to 

induce a foreign official to use his influence with a foreign governmental instrumentality to 

influence any act or decision of such government or instrumentality.  

24. As a result of the conduct described above, Westport violated, and Gougarty  

caused Westport’s violation of, Section 13(b)(2)(A) of the Exchange Act, which requires every 

issuer with a class of securities registered pursuant to Exchange Act Section 12 to make and keep 

books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the 

transactions and disposition of the assets of the issuer. 

25. As a result of the conduct described above, Westport violated, and Gougarty 

caused Westport’s violation of, Section 13(b)(2)(B) of the Exchange Act which requires every 

issuer with a class of securities registered pursuant to Exchange Act Section 12 to devise and 

maintain a system of internal accounting controls sufficient to provide reasonable assurances that 

(i) transactions are executed in accordance with management’s general or specific authorization; 

(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in 

conformity with generally accepted accounting principles or any other criteria applicable to such 

statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in 

accordance with management’s general or specific authorization; and (iv) the recorded 

accountability for assets is compared with the existing assets at reasonable intervals and 

appropriate action is taken with respect to any differences. 

 

26. As a result of the conduct described above, Gougarty knowingly violated Section 

13(b)(5) of the Exchange Act, which provides that no person shall knowingly circumvent or 

knowingly fail to implement a system of internal accounting controls or knowingly falsify any 

book, record or account, and Exchange Act Rule 13b2-1, which prohibits persons from directly or 

indirectly falsifying or causing to be falsified any book, record or account.   

 

27. As a result of the conduct described above, Gougarty violated Exchange Act Rule 

13a-14, which requires that a principal executive officer and a principal financial officer must 

certify in each annual report filed or submitted under Section 13(a) of the Exchange Act that he or 

she has reviewed the report and, among other things, disclosed to the issuer’s auditors and the audit 

committee of the issuer’s board of directors, all significant deficiencies and material weaknesses in 

the design or operation of internal control over financial reporting which are reasonably likely to 

adversely affect the issuer’s ability to record, process, summarize and report financial information. 

 

Westport’s Remedial Efforts 

    28.      In determining to accept Westport’s Offer, the Commission considered remedial 

acts undertaken by Westport concerning its anti-corruption and financial reporting compliance 

programs, and its cooperation afforded the Commission staff. 

    29. During the course of the staff’s investigation, Westport enhanced its 

anticorruption and compliance policies and training programs, and its disclosure policies and 



 7 

controls.  Westport enhanced its antibribery and anticorruption controls by adopting revised 

policies that, among other things, establish specific controls for transactions involving foreign 

government officials and entities, mandate due diligence for such transactions, and specifically 

require Westport’s business partners to agree to abide by antibribery laws, including the FCPA.   

   30.   Westport’s cooperation included making foreign witnesses available for testimony 

at the Commission’s Regional Office in Los Angeles and voluntarily producing additional 

requested documents.   

Undertakings 

 

  31.  Westport undertakes to: 

(1) Report to the Commission staff periodically during a two-year term, the 

status of its remediation and implementation of compliance measures, particularly as to 

the areas of due diligence of third-party entities and persons, FCPA training and the 

testing of relevant controls including the collection and analysis of compliance data. 

(2)   During this period, should Westport discover credible evidence, not 

already reported to Commission staff, that questionable or corrupt payments or 

questionable or corrupt transfers of value may have been offered, promised, paid, or 

authorized by Westport, or any entity or person acting on behalf of Westport, or that 

related false books and records have been maintained, Westport shall promptly report 

such conduct to the Commission staff.  

(3) During this two-year period, Westport shall: (1) conduct an initial review 

and submit an initial report and (2) conduct and prepare two follow-up reviews and 

reports, as described below:  

a. Westport shall submit to the Commission staff a written report 

within 180 calendar days of the entry of this Order setting forth a complete 

description of its FCPA and anti-corruption related remediation efforts to date, its 

proposals reasonably designed to improve the policies and procedures of Westport 

for the purpose of compliance with the FCPA and other applicable anticorruption 

laws, and the parameters of the subsequent review (the “Initial Report”).   

b.  The Initial Report shall be transmitted to Ansu N. Banerjee, 

Assistant Regional Director, United States Securities and Exchange Commission, 

444 Flower St., Suite 900, Los Angeles, California 90071.  Westport may extend 

the time period for issuance of the Initial Report with prior written approval of the 

Commission staff.  

c. Westport shall undertake two follow-up reviews, incorporating any 

comments provided by the Commission staff on the previous report, to further 

monitor and assess whether the policies and procedures of Westport are 

reasonably designed to detect and prevent violations of the FCPA and other 

applicable anti-corruption laws (the “Follow-Up Reports”).  



 8 

d. The Follow-up Report shall be completed by no later than 270 

days after the Initial Report.  The second Follow-up Report shall be completed by 

no later than 450 days after the completion of the Initial Report.  Westport may 

extend the time period for issuance of the Follow-up Reports with prior written 

approval of the Commission staff.  

e. The periodic reviews and reports submitted by Westport will likely 

include proprietary, financial, confidential, and competitive business information.  

Public disclosure of the reports could discourage cooperation, impede pending or 

potential government investigations and thus undermine the objectives of the 

reporting requirement.  For these reasons, among others, the reports and the 

contents thereof are intended to remain and shall remain nonpublic, except (a) 

pursuant to court order, (b) as agreed by the parties in writing, (c) to the extent 

that the Commission staff determines in its sole discretion that disclosure would 

be in furtherance of the Commission’s discharge of its duties and responsibilities, 

or (d) is otherwise required by law.  

f. During this two-year period of review, Westport shall provide its 

external auditors with its annual internal audit plan and reports of the results of 

internal audit procedures and its assessment of its FCPA compliance policies and 

procedures.  

g. During the two-year period of review, Westport shall provide 

Commission staff with any written reports or recommendations provided by 

Westport’s external auditors in response to Westport’s annual internal audit plan, 

reports of the results of internal audit procedures, and its assessment of its FCPA 

compliance policies and procedures.  

(4) Certify, in writing, compliance with the undertaking(s) set forth above. 

The certification shall identify the undertaking(s), provide written evidence of 

compliance in the form of a narrative, and be supported by exhibits sufficient to 

demonstrate compliance.  The Commission staff may make reasonable requests for 

further evidence of compliance, and Westport agrees to provide such evidence. The 

certification and supporting material shall be submitted to Ansu N. Banerjee, Assistant 

Regional Director, United States Securities and Exchange Commission, 444 Flower St., 

Suite 900, Los Angeles, California 90071 no later than sixty (60) days from the date of 

the completion of the undertakings.  

 

 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondents’ Offers. 



 9 

 Accordingly, it is hereby ORDERED that: 

 A. Pursuant to Section 21C of the Exchange Act, Westport and Gougarty cease and 

desist from committing or causing any violations and any future violations of Sections 30A, 

13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act.  

B. Pursuant to Section 21C of the Exchange Act, Gougarty cease and desist from 

committing or causing any violations and any future violations of Section 13(b)(5) of the Exchange 

Act and Rules 13a-14 and 13b2-1 thereunder.  

C.   Westport shall comply with the undertakings enumerated in paragraph 31, above. 

 

D.  Westport shall pay disgorgement of $2,350,000, prejudgment interest of $196,000 

and civil penalties of $1,500,000, to the Securities and Exchange Commission for a total payment 

of $4,046,000 to the Securities and Exchange Commission for transfer to the general fund of the 

United States Treasury, subject to Section 21F(g)(3) of the Exchange Act.  Payment shall be made 

in the following installments:  $2,023,000 within fourteen days of the entry of this Order, and four 

payments of $505,750 each to be made within 90, 180, 270, and 362 days from the entry of this 

Order.  Payments shall be applied first to post order interest, which accrues pursuant to SEC Rule 

of Practice 600 and pursuant to 31 U.S.C. 3717.  Prior to making the final payment set forth herein, 

Westport shall contact the staff of the Commission for the amount due.  If Westport fails to make 

any payment by the date agreed and/or in the amount agreed according to the schedule set forth 

above, all outstanding payments under this Order, including post-order interest, minus any 

payments made, shall become due and payable immediately at the discretion of the staff of the 

Commission without further application to the Commission. 

 E.  Gougarty shall, within 10 days of the entry of this Order, pay a civil money penalty 

of $120,000 to the Securities and Exchange Commission for transfer to the general fund of the 

United States Treasury, subject to Section 21F(g)(3) of the Exchange Act.   

 F. If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. 

§ 3717 or SEC Rule of Practice 600.  Payment must be made in one of the following ways:   

(1)  Respondents may transmit payment electronically to the Commission, 

which will provide detailed ACH transfer/Fedwire instructions upon request;  

(2)  Respondents may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

(3)  Respondents may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

Payments by check or money order must be accompanied by a cover letter identifying 

Westport or Gougarty in these proceedings, and the file number of these proceedings.  A copy of 

the cover letter and check or money order must be sent to Charles Cain, Chief, FCPA Unit, 



 10 

Division of Enforcement, Securities and Exchange Commission, 100 F Street, N.E., Washington, 

DC 20549.   

 G.   Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes.  To 

preserve the deterrent effect of the civil penalty, Respondents agree that in any Related Investor 

Action, they shall not argue that they are entitled to, nor shall they benefit by, offset or reduction of 

any award of compensatory damages by the amount of any part of Respondents’ payment of a civil 

penalty in this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a 

Penalty Offset, Respondents agree that they shall, within 30 days after entry of a final order 

granting the Penalty Offset, notify the Commission's counsel in this action and pay the amount of 

the Penalty Offset to the Securities and Exchange Commission.  Such a payment shall not be 

deemed an additional civil penalty and shall not be deemed to change the amount of the civil 

penalty imposed in this proceeding.  For purposes of this paragraph, a "Related Investor Action" 

means a private damages action brought against Respondents by or on behalf of one or more 

investors based on substantially the same facts as alleged in the Order instituted by the 

Commission in this proceeding. 

 

V. 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Gougarty, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Gougarty under this Order or any other judgment, order, consent order, decree or 

settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Gougarty of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary