Smith & Wesson pays $2 million to SEC for violations

On Monday, Smith & Wesson Holding Corporation agreed to shell out $2 million to the Securities and Exchange Commission for allegedly bribing foreign officials in an effort to secure contracts to supply firearms to military and law enforcement overseas.

Between 2007 and 2010, international sales reps for the Springfield, Massachusetts-based company were “engaged in a pervasive effort to attract new business by offering, authorizing, or making illegal payments or providing gifts meant for government officials in Pakistan, Indonesia, and other foreign countries,” stated a SEC press release.

In one deal with a Pakistani police department, a S&W sales agent gifted $11,000 in guns to officials as well as additional cash payments to secure a contract that included the sale of 548 pistols, which netted the company over $100,000 in profit, according to the SEC order.

“This is a wake-up call for small and medium-size businesses that want to enter into high-risk markets and expand their international sales,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit. “When a company makes the strategic decision to sell its products overseas, it must ensure that the right internal controls are in place and operating.”

Meanwhile, company executives were happy to put the matter to bed.

“We are pleased to have concluded this matter with the SEC and believe that the settlement we have agreed upon is in the best interests of Smith & Wesson and its shareholders,” said Smith & Wesson’s chief executive, James Debney, in a statement.

“Today’s announcement brings to conclusion a legacy issue for our company that commenced more than four years ago, and we are pleased to now finally put this matter behind us.” continued Debney, who came on as chief executive in September 2011.

{ 10 comments… add one }
  • John Atwood June 15, 2015, 8:16 am

    I am getting ready to buy 3 new guns, 2-22LR and 1 223 AR. You helped me eliminate one of the manufacturers I was considering. “What goes around, comes around”

    77 year old sympathizer

  • Guy September 24, 2014, 7:53 pm

    Just got back my model 60 Performance Center produced stainless 357 I sent back because of poor workmanship. They had the nerve to return the gun without addressing a single issue with the problem stamping.All they did was clean the gun and never even made a comment about the workmanship. DO NOT BUY A s&w PRODUCT… the company no longer cares about quality. Maybe that is a result of having to pay this fine… I hope they go bankrupt next! I’m a 70 year old who saved up o buy this gun. A performance Center gun is supposed to be something extra nice… what I got for my money is junk. If your wondering how this happened its because I bought the gun on-line through a GunBroker dealer… I never got to closely inspect it before plunking down my savings.
    BuzGuy

    • alan June 15, 2015, 7:19 am

      hey BuzGuy
      and bankrupted our once great nation.

  • Keith August 4, 2014, 3:39 pm

    Unfortunately in many countries bribery is the only way to get a sale or anything else done if you are doing business there. It is they way things are done. If you want to participate you have to adopt a “when in Rome” policy. Why should it matter to our government how a company gets a sale out from of this country. It is in our countries interest to increase exports and to get them you have to play by the rules where you are trying to sell.

  • bill August 4, 2014, 9:21 am

    Way to stifle growth and punish our domestic producers SEC. But hey, you did make up for your own budget short falls and insure the survival of your union in these times of uncertain budget woes.

  • Dan Branscome August 4, 2014, 7:15 am

    It seems that gun manufacturers, going back to Samuel Colt (and probably before) have always given presentation guns to prospective customers and decision makers, including our own government and military. If the SEC is so concerned about corruption in Pakistan and Indonesia, maybe they could look in to how our foreign aid tax dollars are diverted by those countries.

  • Jimbo August 4, 2014, 6:29 am

    Meanwhile, S&W still has to deal with Brazilian and Chinese gun suppliers who have no such restrictions on their sales strategy. Nice going SEC…stifling what is considered ‘common and legal’ in these other countries, you’ve clipped the wings of S&W and their employees and suppliers. I’m sure they’ll appreciate that.

    • listen to this August 4, 2014, 12:49 pm

      What about all of our bribed elected officials. Look at all the generous donations our presidents get from pharmaceutical drug companies, oil companies, green energy, etc. How is this case any different? ? If every president had to hang a list of the companies that donated on the podium during election time people would know what they are voting for.

      • Jon Will June 15, 2015, 4:39 pm

        It’s pretty obvious the reason S&W was targeted by the SEC was because of what they manufacture. How about the targeting and denial of 501c status to persons or organizations who weren’t PC in the IRS’s eyes. And the beat goes on and on and on.

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