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PTC subpoenaed in China payments probe

PTC Inc. said Tuesday it received an SEC  subpoena in connection with an FCPA investigation that appears to have widened since the company first announced the start of settlement talks with the DOJ and SEC in February.

The probe of PTC (formerly Parametric Technology Corporation) concerns “payments and expenses” by China business partners and employees that raise FCPA compliance concerns.

PTC said in February it had started settlement talks with the DOJ and SEC, adding that the agencies were requesting more information.

The filing on Tuesday didn’t mention any current settlement talks.

PTC helps manufactures in the industrial equipment, automotive, high tech and electronics, aerospace and defense, retail, consumer, and medical device industries.

The Needham, Massachusetts-based firm has a “Corporate Visit Center” in Shanghai.


Here’s PTC’s most recent FCPA disclosure from its Form 10-Q filed May 6, 2014:

We have been cooperating to provide information to the U.S. Securities and Exchange Commission and the Department of Justice concerning payments and expenses by certain of our business partners in China and/or by employees of our Chinese subsidiary that raise questions concerning compliance with laws, including the U.S. Foreign Corrupt Practices Act.

Our internal review is ongoing and now includes periods earlier than those previously examined. We continue to respond to requests for information from these agencies, including a subpoena issued to the company by the SEC. We cannot predict when or how this matter may be resolved. Resolution of this matter could include fines and penalties; however we are unable to estimate an amount that could be associated with any resolution and, accordingly, we have not recorded a liability for this matter.

If resolution of this matter includes substantial fines or penalties, this could materially impact our results for the period in which the associated liability is recorded or such amounts are paid. Further, any settlement or other resolution of this matter could have collateral effects on our business in China, the United States and elsewhere.

We terminated certain employees and business partners in China in connection with this matter, which may have an adverse impact on our level of sales in China. Revenue from China has historically represented 5% to 7% of our total revenue


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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