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From Siemens 8, Sharef settles with SEC, Steffen fights

A former Siemens executive charged by the SEC with violating the Foreign Corrupt Practices Act has reached agreement in principle to settle his case.

Ariel Sharef and the SEC are preparing settlement documents, the SEC told a federal judge in New York City last week. The SEC didn’t disclose terms but asked the judge to suspend the case pending final settlement.

Sharef — a former member of the central executive committee of Siemens AG — becomes the second former Siemens executive to settle civil charges with the SEC.

Late last year, Bernd Regendantz agreed to pay a civil penalty of $40,000 to resolve FCPA violations. The SEC deemed the penalty ‘satisfied by Regendantz’ payment of a €30,000 administrative fine ordered by the Public Prosecutor General in Munich, Germany.’

In December last year, eight former Siemens employees and agents were also charged in a U.S. criminal indictment with bribing government officials in Argentina. The indictment included conspiracy to violate the antibribery, books and records, and internal control provisions of the FCPA; conspiracy to commit wire fraud; conspiracy to commit money laundering; and substantive wire fraud.

Regendantz wasn’t charged in the criminal case.

The defendants are non-U.S. citizens and live outside the U.S. None have appeared in court to answer the criminal charges.

In the SEC’s civil case against six of the defendants, Herbert Steffen — a former chief executive officer of Siemens Argentina — filed a motion last week to dismiss the charges against him. He said in a court filing that he’s not subject to U.S. jurisdiction and the SEC’s claims are barred by the FCPA’s five-year statute of limitations.

A memorandum supporting his motion said:

Mr. Steffen, 74 years of age, is a German citizen residing in Germany. He is trained as an engineer, and spent his entire career at Siemens Aktiengesellschaft (“Siemens”) and its subsidiaries with postings in Germany, Brazil, and Argentina. He was never employed in the United States, and never travelled to the United States on business for Siemens during the entire period alleged in the complaint. The complaint alleges he had managerial positions in Siemens’ Argentina business from 1983 through 1989 and again in 1991. There are no allegations of any improprieties during the period he had such responsibilities. He retired from Siemens nearly ten years ago and has not been employed since.

A day after the DOJ filed the criminal indictment last year, prosecutors told the court that ‘none of the defendants will be arraigned in the immediate future. The Government will keep the Court apprised of any developments regarding the defendants’ extradition.’

The judge asked the DOJ to file a status report by May 1. But the court docket doesn’t show a status report or any activity since the indictment.

Siemens’ settlement in December 2008 with the DOJ and SEC for $800 million is still the biggest FCPA case of all time.

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