3M Agrees to Pay $6.5 Million to Resolve FCPA Violations

The SEC has found that 3M Company violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934 by engaging in improper activities related to its foreign contracts. Specifically, employees of a 3M subsidiary based in China arranged for Chinese government officials employed by state-owned healthcare facilities to attend overseas conferences, educational events, and healthcare facility visits. In some instances, these arrangements included tourism activities such as shopping excursions or leisure activities. 3M's subsidiary also paid nearly $1 million for trips for Chinese government officials which involved tourism activities, while providing false information to compliance personnel and falsifying documents to cover up the improper activities. To settle the charges, 3M agreed to pay $6.5 million, including a $2 million civil penalty and disgorgement plus interest totaling $4.5 million. The investigation was conducted by the SEC's FCPA Unit and Boston Regional Office.