Responding to our post Where The Money Is, Washington, D.C. lawyer Marc Alain Bohn suggested we include ABB in the settlement pipeline. He’s right.
In December 2008, the Swiss engineering company said it reserved about $850 million for possible resolution of U.S. and European corruption charges.
A story from Dow Jones Deutschland said:
The provisions are for potential costs related to the previously disclosed investigations by the U.S. and European authorities into suspect payments and alleged anti-competitive practices, respectively. The provisions also include an amount for the anticipated impact of a pending tax dispute, asset write downs and restructuring charges relating to the weaker business environment.
The announcement of the $850 million reserve followed ABB’s disclosure in an earnings release of this item:
On July 13, 2007, ABB disclosed to the U.S. Department of Justice and the U.S. Securities and Exchange Commission suspect payments made by employees of company subsidiaries in Asia, South America and Europe, in particular Italy. These suspect payments were discovered as a result of ABB’s internal audit and compliance program. The payments may be in violation of the Foreign Companies (sic) Practices Act or other applicable laws. If ABB is found to have violated any of these laws, the company could be liable for penalties and other costs and the violations could otherwise negatively impact its business. ABB is cooperating on these issues with the relevant authorities and is continuing its internal investigations and compliance reviews.
ABB had a prior FCPA settlement with the DOJ and SEC that made our big-money list. In July 2004, the company and two subsidiaries disgorged $5.9 million and paid a $10.5 million criminal penalty for violations involving Nigeria, Angola and Kazakhstan. The SEC’s July 6, 2005 litigation release is here.
ABB Ltd’s shares trade on the New York Stock Exchange under the symbol ABB.
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