Moog Inc. to Pay $1.7 Million in SEC Settlement Over FCPA Violations

Moog Inc., a New York-based global manufacturer of motion control systems, has agreed to pay $1.7 million to settle charges brought by the Securities and Exchange Commission (SEC) for violations of the Foreign Corrupt Practices Act (FCPA). The charges stem from a bribery scheme involving the company's wholly owned Indian subsidiary, Moog Motion Controls Private Limited.

The SEC announced the settlement on October 11, 2024, detailing how Moog Motion Controls employees engaged in corrupt practices from 2020 through 2022. The subsidiary allegedly bribed various Indian officials to secure business advantages and manipulate public tenders in India to favor Moog's products and exclude competitors.

According to the SEC's order, the bribery scheme involved multiple methods to conceal improper payments, including funneling them through third-party agents and distributors. This sophisticated approach to corruption highlights the challenges multinational companies face in maintaining ethical practices across global operations.

Charles E. Cain, Chief of the SEC Enforcement Division's FCPA Unit, emphasized the importance of robust compliance and internal accounting controls for companies operating internationally. "The SEC's action against Moog highlights the need for issuers operating internationally to have appropriate compliance and internal accounting controls over third parties and third-party payments, as weaknesses in those systems heighten corruption risk," Cain stated.

The SEC found that Moog violated the recordkeeping and internal accounting controls provisions of the FCPA. Without admitting or denying the findings, Moog consented to a cease-and-desist order and agreed to pay nearly $600,000 in disgorgement and prejudgment interest, along with a civil penalty of $1.1 million.

The settlement with Moog Inc. is part of the SEC's broader efforts to combat corporate corruption and maintain the integrity of global markets. As companies continue to expand their international operations, the need for stringent compliance programs and internal controls becomes increasingly critical to avoid running afoul of anti-corruption laws.

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