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14 Days Later …

A recent post (here) discussed a December 30, 2009 SEC filing by The PBSJ Corporation (a global engineering and architectural firm headquartered in Florida) which disclosed that the company was unable to file its Annual Report due to an FCPA internal investigation “in connection with certain projects undertaken by PBS&J International, Inc., one of the Company’s subsidiaries, in certain foreign countries.”

I noted that while it is increasingly common for a company to disclose such FCPA issues, it is rather unusual for the FCPA disclosure to prevent the company from otherwise meeting its disclosure requirements under the securities laws.

Well, 14 days have passed and PBSJ filed its annual report (here). As to the FCPA internal investigation, here is what the filing says:

“As previously reported on our Form 8-K filed December 30, 2009, an internal investigation is currently being conducted by the Audit Committee of our Board of Directors to determine whether any laws, including the Foreign Corrupt Practices Act (“FCPA”), may have been violated in connection with certain projects undertaken by PBS&J International, Inc., one of our subsidiaries with revenue of $4.3 million in fiscal year 2008 and $3.9 million in fiscal year 2009, in certain foreign countries (the “International Operations”). Initial results of the investigation suggest that FCPA violations may have occurred. However, the investigation does not suggest that any violation extends beyond the International Operations or that members of our executive management were involved in illegal conduct. We have voluntarily disclosed the possible violations, the investigation, and the initial findings to the Department of Justice and to the Securities and Exchange Commission, and will cooperate fully with their review. The FCPA (and related statutes and regulations) provides for potential monetary penalties, criminal and civil sanctions, and other remedies. We are unable to estimate the potential penalties that might be assessed for these FCPA violations and accordingly, no provision has been made in the accompanying financial statements.”

The events at PBSJ over the last two weeks are intriguing and its a head-scratching question why so many companies, like PBSJ, voluntarily disclose initial results of a yet to be completed internal investigation which merely suggest that the FCPA may have been violated.

For a recent non-FCPA, yet related, NY Times article on disclosure issues, see here.

PBSJ Corp. Unable to File Annual Report

The PBSJ Corporation is a global engineering and architectural firm headquartered in Florida.

In its recent SEC filings (here and here), the company announced that it was unable to file its Annual Report due to an FCPA internal investigation “in connection with certain projects undertaken by PBS&J International, Inc., one of the Company’s subsidiaries, in certain foreign countries.”

The filing indicates that:

“The Company is unable to determine at this time (i) whether the results of the internal investigation will indicate that its internal controls over financial reporting were not operating effectively, (ii) the impact, if any, such internal investigation may have on the Company’s annual report on internal control over financial reporting that the Company is required to include in the Form 10-K, or (iii) the effect, if any, such internal investigation may have on the Company’s financial statements to be included in the Form 10-K.”

According to the filing:

“The Company has self-reported to the Securities and Exchange Commission (the “SEC”) and the Department of Justice (the “DOJ”) the circumstances surrounding this internal investigation. Should the SEC or DOJ decide to conduct its own investigation, the Company will cooperate fully.”

PBS&J International, Inc.’s “previous international assignments have extended to nearly every corner of the world” and its “recent global pursuits have centered on prominent projects in the Middle East, North Africa, the Caribbean, Central and South America, Europe, and Australia” – according to the company’s website (see here).

While it is increasingly common for a company to disclose such FCPA issues (see here for prior posts on voluntary disclosure), it is rather unusual for the FCPA disclosure to prevent the company from otherwise meeting its disclosure requirements under the securities laws.

For local media coverage of PBSJ’s disclosure (see here).

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