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FCPA Blog Daily News

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Monday
Aug182014

Layne Christensen cuts FCPA reserve by half after DOJ declination

Image courtesy of Layne ChristiansenTexas-based water treatment firm Layne Christensen said in an SEC filing Friday that after a four-year investigation, the DOJ won't file any charges for violations of the Foreign Corrupt Practices Act. "The DOJ has notified Layne that it considers the matter closed," the filing said.

Layne said the SEC's parallel investigation remains open and the company "is actively engaged in settlement discussions with the SEC to resolve this matter."

David A.B. Brown, Layne's president and CEO, said Layne hopes to settle the SEC investigation "in the near future."

The company previously accrued a reserve of $10.4 million for settlement of the DOJ and SEC investigations but will now reduce the reserve.

"Based on the decision by the DOJ," Layne said Friday, "the company will reduce the accrual related to this investigation by approximately $5.3 million, which will be reflected in Layne’s results of operations for the second fiscal quarter ended July 31, 2014."

Layne said "questions were raised internally" in 2010 about "the legality of certain payments by Layne to agents and other third parties interacting with government officials in certain countries in Africa."

The board's audit committee hired lawyers and accounting firms for an internal investigation.

"Layne has been consistent and forthcoming in providing voluntary disclosure to the DOJ and the [SEC] regarding the results of the investigation, and has cooperated fully with those agencies in connection with their review of the matter," Layne said Friday.

CEO Brown said, "Based on conversations with the DOJ, we understand that our voluntary disclosure, cooperation and remediation efforts have been recognized and appreciated by the staff of the DOJ and that the resolution of the investigation reflects these matters.”

Layne Christensen Company trades on NASDAQ under the symbol LAYN.

The company's Form 8-K filed with the SEC on August 15, 2014 is here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.