Settlements

ST-308
Rockwell Automation Inc.
Rockwell Automation Inc.
United States
Securities and Exchange Commission
China
2011
05/03
Unknown
Legal Person
Civil
Consent to Cease-and-Desist Order
Disgorgement of Profits, Prejudgment Interest, Civil Penalty
$2,761,091.00
$1,771,000
$590,091
$400,000
$0
Art.16, Art.26
Art. 1, Art. 2, Art. 8
Books and records, internal controls failure
No admission of SEC findings
Yes
According to Law.com, citing Alexandra Wrage of Trace International as source, this case was unusual in that the Department of Justice chose not to bring charges against the company (termed "split decision" by SEC and DOJ). (Source: Brian Zabcik, "Reasonable Minds Can Disagree: SEC, DOJ Part Ways on Rockwell Payments," Law.com, May 5, 2011, accessed at http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202492959767). The SEC Cease-and-Desist Order made the following findings of misconduct (which Rockwell did not admit or deny as part of the settlement agreement): (1) from 2003 to 2006, payment of $615,000 by certain employees of Rockwell's former subsidiary in China, China Rockwell Automation Power Systems (Shangai) Ltd. to Design Institutes, which were typically state-owned enterprises and (2) approximately $450,000 to fund sightseeing and other non-business trips for employees of Design Institutes and other state-owned companies. Rockwell realized approximately $1.7 million in net profits on sales contracts with end-user Chinese government-owned companies that were associated with payments to the Design Institutes. (Source: In the Matter of Rockwell Automation, Inc., Order Instituting Cease and Desist Order, SEC Administrative Proceeding File No. 3-14364 (May 3, 2011).