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Layne Christensen more than doubles FCPA settlement reserve

Kansas-based Layne Christensen Company said last week it has increased its reserve for a potential FCPA settlement from $4.8 million to $10.4 million. That amount, the company said, represents the low end of the range for a possible settlement, which could also reach $16 million or more.

Layne Christensen — a water management, construction, and drilling company — said it was updating its FCPA policy in 2010 when it discovered payments to agents and other third parties “interacting with government officials in certain countries in Africa.”

An internal investigation then found documents and other evidence of “improper payments” that may violate the FCPA and other local laws, the company said.

It said the payments occurred over a long time and related “to the payment of taxes, the importing of equipment and the employment of expatriates.”

Layne Christensen made a voluntary disclosure to the DOJ and SEC and has talked to both about a settlement. Earlier this year, the company said, the SEC estimated $4.8 million as the benefit and interest that could be due as disgorgement in a settlement. It also thinks a criminal penalty will be part a settlement.

In its latest quarterly filing it said :

An analysis of the resolution of recent and similar FCPA resolutions, the Company currently estimates a potential settlement range for resolving these matters (including the amount of a monetary penalty and the disgorgement of any improper benefits plus and interest) of $10.4 million to $16.0 million. 

There’s no settlement in principle yet and Layne Christensen said it “can provide no assurances as to whether [it] will be able to settle for an amount equal to its current reserve or within its estimated settlement range or whether the SEC or DOJ will accept voluntary settlement terms” that would also be acceptable to the company.

Layne Christensen Company trades on NASDAQ under the symbol LAYN.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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