Security-Device Maker OSI Says U.S. Ends Bribery Probes
June 05 2019 - 6:13PM
Dow Jones News
By Dylan Tokar
U.S. authorities have closed foreign-bribery probes into OSI
Systems Inc. following the dismissal last month of a shareholder
lawsuit against the maker of airport security systems, the company
said Wednesday.
The Hawthorne, California-based company last year disclosed the
Foreign Corrupt Practices Act investigations, which were being
conducted by the Securities and Exchange Commission and Justice
Department.
An OSI Systems representative didn't immediately respond to a
request for comment. The SEC and Justice Department declined to
comment.
The probes followed a 2017 report by short seller Muddy Waters
LLC, which alleged that OSI Systems had won a cargo-scanning
contract in Albania by paying bribes. OSI Systems denied the
allegations at the time.
The report prompted shareholder lawsuits, citing Muddy Waters's
research and accusing OSI Systems of misleading investors about the
Albania contract, according to complaints filed in federal court in
California.
A federal judge in California dismissed those claims in May,
saying OSI's securities filings didn't qualify as misstatements
under U.S. securities law or contain illegal omissions. The share
price of OSI Systems rose 4.4% Wednesday.
This isn't the first time that Muddy Waters has highlighted
potential FCPA violations to bet that the price of a company's
stock will fall.
In 2015, the firm said it expected a drop in stock prices of
TeliaSonera, now called Telia Co., alleging that the Swedish
telecommunications company may have paid billions of dollars in
bribes in Eurasia and Nepal. Telia at the time was under
investigation for FCPA violations in Uzbekistan. In 2017, the
company agreed to pay $965 million in settlements with the SEC and
prosecutors in the U.S. and Netherlands to resolve the Uzbekistan
probes.
Write to Dylan Tokar at Dylan.Tokar@wsj.com
(END) Dow Jones Newswires
June 05, 2019 18:58 ET (22:58 GMT)
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