433 MISCELLANEOUS the subsidiary’s president reported directly to the CEO of the parent issuer, the parent company’s legal department approved of the retention of the third-party agent through which the bribes were arranged and, despite a lack of documented due diligence, an officer of the parent company approved one of the payments to the third-party agent. Similarly, in 2012, Tyco International Ltd. (“Tyco”), a company of Swiss origin and listed on the New York Stock Exchange, agreed to pay fines to the U.S. authorities for violations of the FCPA by its Florida-based subsidiary TEM / A-COM, Inc. (“TEMACOM”), along with other subsidiaries in China, Germany, Thailand and France. In this case, with the knowledge of TEMACOM employees, foreign officials were bribed through the sales representative and therefore, whether the parent company Tyco was responsible was also analyzed. In this context, the SEC concluded that Tyco controlled TEMACOM due to various reasons, such as four senior executives of Tyco, the parent company, were also TEMACOM officials, and one of the Tyco executives was a board member of TEMACOM. In this context, it was claimed that the relevant officials acted as Tyco’s agents within the framework of the corporate structure of the companies and that Tyco was, therefore, accountable for the violation, even if it was unaware of the mentioned illegal actions. Accordingly, in a case against PTC Inc. (“PTC”), which concerned violations of provisions of the FCPA by the PTC, the SEC evaluated improper payments made to Chinese government officials by two wholly-owned PTC subsidiaries (collectively, “PTC-China”). The SEC argued that PTC China made payments to third party agents, disguised as commission payments or sub-contracting fees, which were then used to pay for non-business-related foreign travel for Chinese government officials, and allowed its sales staff to provide Chinese government officials with gifts and excessive entertainment. The SEC concluded that PTC exercised substantial control over PTC-China after evaluating several factors. Firstly, the PTC-China employees did not have an independent management structure, but had global functional reporting lines to the PTC, which allowed the PTC the control over PTC-China’s activities. Secondly, PTC-China’s senior sales staff reported to a Division Vice President of Sales, who was a PTC employee based in China. For sales operations and global services, various PTC-
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