Two former Panasonic Avionics executives have been charged by the Securities and Exchange Commission with violations of the books and records and internal accounting controls provisions of the federal securities laws and causing similar violations by the parent company, Panasonic Corp.
The SEC said former CEO of Panasonic Avionics, Paul Margis, used a third-party to pay over $1.76 million to consultants, including a government official, in order to win business from a state-owned airline. Regulators also said the former CFO, Takeshi Uonaga, caused the parent company to improperly record $82 million in revenue based on a backdated contract. Uonaga also made false representations to Panasonic Avionics’ auditor about financial statements.
Uonaga was also suspended from appearing or practicing before the SEC as an accountant. He agreed to pay a penalty of $50,000 and can apply for reinstatement after five years. Margis agreed to a penalty of $75,000. In consenting to the penalties, the two men neither admitted nor denied the findings.
“Holding individuals accountable, particularly senior executives, is critical,” Antonia Chion, associate director of the SEC’s enforcement division, said. “Compliance starts at the top and senior executives who fail in their duty to comply with the federal securities laws will be held responsible.”
In April, Panasonic agreed to pay $143 million to settle with the SEC over charges related to the Foreign Corrupt Practices Act and to accounting fraud violations. It agreed to pay a criminal penalty of more than $137 million as part of a deferred prosecution agreement with the Department of Justice.
Regulators said Panasonic Avionics was negotiating two agreements worth more than $700 million when the alleged bribery scheme took place. PAC paid the official at the state-owned airline approximately $875,000 for a job that required little to no work, using a third-party vendor to conceal the payments.