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Why pre-acquisition due diligence and post-acquisition remediation are so critical

Tom Fox | September 19, 2016

The SEC settled a rare FCPA enforcement action against an individual last week when it announced the resolution of a matter involving Jun Ping Zhang, via a Cease and Desist Order. The matter involved Harris Corporation and its Chinese business unit Hunan CareFX Information Technology, CareFx China). Ping, a US citizen served as both Harris Corporations’s Vice President of Technology and CareFx China’s Chairman and CEO in 2011 and 2012. Harris employed Ping with its acquisition of the US entity CareFX Corporation.

Harris Corp. interviewed Ping in its pre-acquisition phase of due diligence of CareFX Corporation and its Chinese subsidiary. However, Ping was not asked any questions about engaging in bribery or corruption, failed to disclose he was leading a massive bribery effort or lied to the pre-acquisition due diligence investigators. He continued to lead this bribery and corruption effort after Harris Cor[.closed the acquisition of CareFX Corp. and thus the Chinese...

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