The Securities and Exchange Commission (SEC) announced on Monday that it has entered into a what is a called a non-prosecution agreement (NPA) with Ralph Lauren Corp. (NYSE: RL). What is interesting about this case is that the issue was uncovered from an internal review by the company and that the company reported this matter to the SEC. Under the agreement, Ralph Lauren Corp. 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.”
A non-prosecution agreement means that there will be no criminal charges filed against the company. The SEC even said here that it has decided not to charge the company under the Foreign Corrupt Practices Act because of its prompt reporting of the violations on its own initiative. Other reasons cited were the completeness of the information provided and the real-time cooperation with the SEC’s investigation, which saved the agency substantial time and resources.
The SEC went on to say that this NPA is the first that the SEC has entered involving Foreign Corrupt Practices Act misconduct. In parallel criminal proceedings, the Justice Department entered into an NPA with Ralph Lauren in which the company will pay an $882,000 penalty.
The bribe payments and gifts to Argentine officials were shown by the SEC to come to a total of $593,000 during a four-year period. Ralph Lauren agreed to pay $593,000 in disgorgement and $141,845.79 in prejudgment interest. It is almost surprising that shares are down even 1.7% at $166.25 on the day.