Smith & Wesson Pays $2 Million to Settle Bribery Probe With SECTom Schoenberg
Smith & Wesson Holding Corp. agreed to pay about $2 million to settle U.S. regulatory claims that it bribed officials in Pakistan, Turkey and other countries to win firearms contracts.
Smith & Wesson employees made improper payments from 2007 to 2010 to secure business with militaries and police departments, the Securities and Exchange Commission said in an administrative order filed today. The gunmaker settled the claims without admitting or denying the allegations.
The case was triggered in part by a sting operation by the Justice Department that led to the arrest of 22 law-enforcement and military-equipment dealers in 2010, including the company’s then vice president of international sales, R. Patrick Caldwell, according to company filings. Caldwell was acquitted by a federal jury in January 2012, and prosecutors declined to pursue charges against the company.
In one instance, Smith & Wesson employees paid bribes through an agent in 2008 for a deal to sell 548 pistols to a Pakistani police department for a profit of $107,852, according to the SEC.
Liz Sharp, vice president of investor relations at Smith & Wesson, didn’t immediately respond to a phone call seeking comment.