The Royal Canadian Mounted Police (RCMP) has concluded an investigation into matters arising from a voluntary disclosure by Nordion Inc. (“Nordion”). In 2012, the company disclosed to the RCMP, the United States Securities and Exchange Commission (SEC) and the United States Department of Justice (DOJ) evidence of historical payments made by a non-employee agent of the company to a Russian official. The evidence indicated that the agent had colluded with a former employee of the company who had received kickbacks from the agent, all of which was unbeknownst to the company until shortly before the voluntary disclosure to these authorities.
Following the discovery of the relevant information, the company’s board acted promptly to appoint a special committee and to retain independent counsel to conduct a full investigation of the matter. At the time of the voluntary disclosure, Nordion was a public company whose shares were listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). Nordion was acquired by a US-based company on August 6, 2014 and its shares were subsequently voluntarily de-listed from the TSX and NYSE.
The RCMP conducted its own investigation into the matter in relation to potential violations of the Corruption of Foreign Public Officials Act (CFPOA) and the Criminal Code, including witness interviews and the assessment of further information obtained by the company in the course of its internal investigation. On December 15, 2015, the RCMP confirmed to the company’s counsel that it had concluded the investigation and was taking no further action against the company.
On March 3, 2016, the SEC issued an Order on consent of the company imposing a civil monetary penalty in the amount of US $375,000 for contravention of the books and records and internal controls provisions of the US Foreign Corrupt Practices Act (FCPA). The SEC issued a parallel order on the same date against the former employee, Mikhael Gourevitch, a dual Canadian/Israeli citizen currently residing in Israel.
The matter is significant in that it is the first public instance of a voluntary disclosure in relation to a potential offence under the CFPOA resulting in no further enforcement action against the disclosing company. It is not known at this time whether the RCMP is considering enforcement action against Gourevitch.