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Veraz Settles With SEC

San Jose, California-based VOiP company Veraz Networks, Inc. paid $300,000 to settle charges brought by the SEC that it violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) by making illegal payments to foreign officials in China and Vietnam.

The SEC said the company hired a consultant in China who in 2007 and 2008 gave gifts and offered improper payments worth about $40,000 to officials at a government-controlled telco to win business for Veraz. Also in 2007 and 2008, a Veraz employee made improper payments to the CEO of a government-controlled company in Vietnam to win.

Veraz had disclosed the $300,000 settlement with the SEC in March. It said then that because of the ongoing compliance investigations, it had to delay filing its quarterly reports for March and May 2008. That resulted in NASDAQ warning Veraz “that its common stock may be subject to delisting.” NASDAQ ultimately granted an extension for the filings, which were made in July 2008, allowing Veraz’s common stock to continue to be listed.

The company said in November 2009 that it had spent $2.5 million to investigate and handle the FCPA compliance issues. The SEC began investigating the company in early 2008. Veraz then launched an internal investigation and discovered potential FCPA violations in China and Indonesia, which it self-reported. The SEC then requested documents related to Vietnam.

The SEC said without elaborating that it had help in its investigation from the U.S. Department of Homeland Security.

Veraz Networks trades on NASDAQ under the symbol VRAZ.

View the SEC’s Litigation Release No. 21581 (June 29, 2010) in Securities and Exchange Commission v. Veraz Networks, Inc., Case No. CV-10-2849 (PVT) (N.D. Cal. filed June 29, 2010) here.

View the SEC’s civil complaint against Veraz here.

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