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.