Rockwell Automation announced that it will forfeit $1.8 million in profits, plus $590,000 in interest, and pay a $400,000 penalty pursuant to a settlement with the Securities and Exchange Commission (SEC).

The settlement involves civil violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA) by Rockwell Automations Power Systems (Shanghai), Ltd. (RAPS), a former Power Systems subsidiary based in China. Rockwell subsequently divested RAPS in connection with the sale of its entire Power Systems business to Baldor Electric Company in January 2007.

According to the SEC order, “From 2003 to 2006, certain employees of [RAPS] paid approximately $615,000 to Design Institutes, which were typically state-owned enterprises that provided design engineering and technical integration services that can influence contract awards by end-user state-owned customers.” The order also states that during that same time period, RAPS paid approximately $450,000 to fund non-business trips for employees of various state-owned companies.

In a statement, the Milwaukee-based automation systems supplier said that it had discovered the alleged violations during its normal financial review process and voluntarily reported them to the SEC. Rockwell also publicly disclosed the potential violations in its annual report filed in November 2006.