SEC Announces Non-Prosecution Agreement With Ralph Lauren Corporation Involving FCPA Misconduct
summary
Ralph Lauren Corporation avoided FCPA charges after self-reporting $593,000 in bribes paid by its Argentine subsidiary to customs officials from 2005–2009, cooperating fully with the SEC, and implementing sweeping compliance reforms, resulting in $734,845.79 in disgorgement and interest to the SEC and an $882,000 penalty to the DOJ.
paragraph
Ralph Lauren Corporation paid $593,000 in bribes through its Argentine subsidiary between 2005 and 2009 to expedite product imports and avoid customs inspections. The misconduct was uncovered internally after the company implemented enhanced compliance measures, and it promptly reported the violations to the SEC, providing extensive cooperation including document translations, witness interviews, and real-time disclosures. As a result, the SEC accepted a non-prosecution agreement requiring $593,000 in disgorgement and $141,845.79 in interest, while the DOJ imposed an additional $882,000 penalty, crediting Ralph Lauren’s remediation, global compliance overhaul, and cessation of operations in Argentina.
narrative
Ralph Lauren Corporation avoided FCPA prosecution after its Argentine subsidiary paid $593,000 in bribes to government and customs officials between 2005 and 2009 to bypass import paperwork, avoid product inspections, and expedite customs clearance. The misconduct was uncovered during an internal review triggered by the company’s newly implemented FCPA compliance program, which included employee training and enhanced third-party due diligence. Ralph Lauren promptly reported the findings to the SEC within two weeks, provided full cooperation—including translating documents, summarizing overseas witness interviews, and making witnesses available—and took decisive remedial actions such as terminating all involved personnel and strengthening global internal controls. The SEC credited these efforts as exceptional, leading to a historic non-prosecution agreement requiring $593,000 in disgorgement and $141,845.79 in prejudgment interest, while the Department of Justice separately imposed an $882,000 penalty. As part of its corrective measures, Ralph Lauren ceased all operations in Argentina and conducted a worldwide risk assessment to identify other potential compliance issues. The SEC and DOJ jointly acknowledged the company’s proactive self-reporting and cooperation as a model for corporate accountability, marking the first-ever SEC NPA in an FCPA case under its Cooperation Initiative.
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Parties
acting director of sec division of enforcementfirst sec npa involving fcpa misconductGeorge S. CanellosKara Brockmeyernon-prosecution agreement with ralph lauren corporationralph lauren corporationralph lauren corporation subsidiarysec fcpa unit chiefsec staff within two weeks of discovering illegal paymentsSecurities and Exchange Commissionviolations to sec on own initiative
Keywords
ralph laurenlauren corporationralphlaurencorporationseclauren corporation'snpafcpacompliancecooperationcorporation'snon-prosecution agreementinvolving fcpafcpa misconduct
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 4
- $882K $882,000 $100K–$1M
- $700K $700,000 $100K–$1M
- $593K $593,000 $100K–$1M
- $142K $141,845 $100K–$1M
Entities 11
- agency acting director of sec division of enforcement
- agency first sec npa involving fcpa misconduct
- person George S. Canellos
- person Kara Brockmeyer
- company non-prosecution agreement with ralph lauren corporation
- company ralph lauren corporation
- person ralph lauren corporation subsidiary
- agency sec fcpa unit chief
- agency sec staff within two weeks of discovering illegal payments
- agency Securities and Exchange Commission
- agency violations to sec on own initiative
Triples 15
- SEC announced non-prosecution agreement with Ralph Lauren Corporation
- Ralph Lauren Corporation will disgorge $700,000 in illicit profits and interest
- Ralph Lauren Corporation subsidiary paid bribes to government officials in Argentina from 2005 to 2009
- SEC determined not to charge Ralph Lauren Corporation with FCPA violations
- Ralph Lauren Corporation reported violations to SEC on own initiative
- Justice Department entered into NPA with Ralph Lauren Corporation
- Ralph Lauren Corporation will pay $882,000 penalty
- George S. Canellos is Acting Director of SEC Division of Enforcement
- Kara Brockmeyer is SEC FCPA Unit Chief
- Ralph Lauren Corporation reported preliminary findings to SEC staff within two weeks of discovering illegal payments
- Ralph Lauren Corporation Argentine subsidiary paid bribes to government and customs officials
- bribe payments and gifts to Argentine officials totaled $593,000 during four-year period
- Ralph Lauren Corporation agreed to pay $593,000 in disgorgement and $141,845.79 in prejudgment interest
- Ralph Lauren Corporation implemented FCPA compliance training program in Argentina
- NPA is first SEC NPA involving FCPA misconduct
PDF (from attached: pdf)
Text layers
Extracted body text (4,640c)
The Securities and Exchange Commission today announced a non-prosecution agreement (NPA) with Ralph Lauren Corporation in which the company will disgorge more than $700,000 in illicit profits and interest obtained in connection with bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009. The misconduct was uncovered in an internal review undertaken by the company and promptly reported to the SEC. The SEC has determined not to charge Ralph Lauren Corporation with violations of the Foreign Corrupt Practices Act (FCPA) due to the company's prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC's investigation. Ralph Lauren Corporation's cooperation saved the agency substantial time and resources ordinarily consumed in investigations of comparable conduct. The NPA is the first that the SEC has entered involving FCPA misconduct. NPAs are part of the SEC Enforcement Division's Cooperation Initiative, which rewards cooperation in SEC investigations. In parallel criminal proceedings, the Justice Department entered into an NPA with Ralph Lauren Corporation in which the company will pay an $882,000 penalty. "When they found a problem, Ralph Lauren Corporation did the right thing by immediately reporting it to the SEC and providing exceptional assistance in our investigation," said George S. Canellos, Acting Director of the SEC's Division of Enforcement. "The NPA in this matter makes clear that we will confer substantial and tangible benefits on companies that respond appropriately to violations and cooperate fully with the SEC." Kara Brockmeyer, the SEC's FCPA Unit Chief, added, "This NPA shows the benefit of implementing an effective compliance program. Ralph Lauren Corporation discovered this problem after it put in place an enhanced compliance program and began training its employees. That level of self-policing along with its self-reporting and cooperation led to this resolution." According to the NPA, Ralph Lauren Corporation's cooperation included: Reporting preliminary findings of its internal investigation to the staff within two weeks of discovering the illegal payments and gifts. Voluntarily and expeditiously producing documents. Providing English language translations of documents to the staff. Summarizing witness interviews that the company's investigators conducted overseas. Making overseas witnesses available for staff interviews and bringing witnesses to the U.S. According to the NPA, the bribes occurred during a period when Ralph Lauren Corporation lacked meaningful anti-corruption compliance and control mechanisms over its Argentine subsidiary. The misconduct came to light as a result of the company adopting measures to improve its worldwide internal controls and compliance efforts, including implementation of an FCPA compliance training program in Argentina. As outlined in the NPA, Ralph Lauren Corporation's Argentine subsidiary paid bribes to government and customs officials to improperly secure the importation of Ralph Lauren Corporation's products in Argentina. The purpose of the bribes, paid through its customs broker, was to obtain entry of Ralph Lauren Corporation's products into the country without necessary paperwork, avoid inspection of prohibited products, and avoid inspection by customs officials. The bribe payments and gifts to Argentine officials totaled $593,000 during a four-year period. Under the NPA, Ralph Lauren Corporation agreed to pay $593,000 in disgorgement and $141,845.79 in prejudgment interest. The SEC took into account the significant remedial measures undertaken by Ralph Lauren Corporation, including a comprehensive new compliance program throughout its operations. Among Ralph Lauren Corporation's remedial measures have been new compliance training, termination of employment and business arrangements with all individuals involved in the wrongdoing, and strengthening its internal controls and its procedures for third party due diligence. Ralph Lauren Corporation also conducted a risk assessment of its major operations worldwide to identify any other compliance problems. Ralph Lauren Corporation has ceased operations in Argentina. The SEC's investigation was conducted by Kristin A. Snyder and FCPA Unit Assistant Director Tracy L. Davis in the San Francisco Regional Office. The SEC appreciates the assistance of the U.S. Department of Justice's Fraud Section, the U.S. Attorney's Office for the Eastern District of New York, and the Federal Bureau of Investigation in this matter.
OCR text (4,640c · plain-text · 99% conf)
The Securities and Exchange Commission today announced a non-prosecution agreement (NPA) with Ralph Lauren Corporation in which the company will disgorge more than $700,000 in illicit profits and interest obtained in connection with bribes paid by a subsidiary to government officials in Argentina from 2005 to 2009. The misconduct was uncovered in an internal review undertaken by the company and promptly reported to the SEC. The SEC has determined not to charge Ralph Lauren Corporation with violations of the Foreign Corrupt Practices Act (FCPA) due to the company's prompt reporting of the violations on its own initiative, the completeness of the information it provided, and its extensive, thorough, and real-time cooperation with the SEC's investigation. Ralph Lauren Corporation's cooperation saved the agency substantial time and resources ordinarily consumed in investigations of comparable conduct. The NPA is the first that the SEC has entered involving FCPA misconduct. NPAs are part of the SEC Enforcement Division's Cooperation Initiative, which rewards cooperation in SEC investigations. In parallel criminal proceedings, the Justice Department entered into an NPA with Ralph Lauren Corporation in which the company will pay an $882,000 penalty. "When they found a problem, Ralph Lauren Corporation did the right thing by immediately reporting it to the SEC and providing exceptional assistance in our investigation," said George S. Canellos, Acting Director of the SEC's Division of Enforcement. "The NPA in this matter makes clear that we will confer substantial and tangible benefits on companies that respond appropriately to violations and cooperate fully with the SEC." Kara Brockmeyer, the SEC's FCPA Unit Chief, added, "This NPA shows the benefit of implementing an effective compliance program. Ralph Lauren Corporation discovered this problem after it put in place an enhanced compliance program and began training its employees. That level of self-policing along with its self-reporting and cooperation led to this resolution." According to the NPA, Ralph Lauren Corporation's cooperation included: Reporting preliminary findings of its internal investigation to the staff within two weeks of discovering the illegal payments and gifts. Voluntarily and expeditiously producing documents. Providing English language translations of documents to the staff. Summarizing witness interviews that the company's investigators conducted overseas. Making overseas witnesses available for staff interviews and bringing witnesses to the U.S. According to the NPA, the bribes occurred during a period when Ralph Lauren Corporation lacked meaningful anti-corruption compliance and control mechanisms over its Argentine subsidiary. The misconduct came to light as a result of the company adopting measures to improve its worldwide internal controls and compliance efforts, including implementation of an FCPA compliance training program in Argentina. As outlined in the NPA, Ralph Lauren Corporation's Argentine subsidiary paid bribes to government and customs officials to improperly secure the importation of Ralph Lauren Corporation's products in Argentina. The purpose of the bribes, paid through its customs broker, was to obtain entry of Ralph Lauren Corporation's products into the country without necessary paperwork, avoid inspection of prohibited products, and avoid inspection by customs officials. The bribe payments and gifts to Argentine officials totaled $593,000 during a four-year period. Under the NPA, Ralph Lauren Corporation agreed to pay $593,000 in disgorgement and $141,845.79 in prejudgment interest. The SEC took into account the significant remedial measures undertaken by Ralph Lauren Corporation, including a comprehensive new compliance program throughout its operations. Among Ralph Lauren Corporation's remedial measures have been new compliance training, termination of employment and business arrangements with all individuals involved in the wrongdoing, and strengthening its internal controls and its procedures for third party due diligence. Ralph Lauren Corporation also conducted a risk assessment of its major operations worldwide to identify any other compliance problems. Ralph Lauren Corporation has ceased operations in Argentina. The SEC's investigation was conducted by Kristin A. Snyder and FCPA Unit Assistant Director Tracy L. Davis in the San Francisco Regional Office. The SEC appreciates the assistance of the U.S. Department of Justice's Fraud Section, the U.S. Attorney's Office for the Eastern District of New York, and the Federal Bureau of Investigation in this matter.