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Ericsson confirms FCPA probe

Image courtesy of EricssonSwedish telecom equipment maker Ericsson said in a statement posted on its website Friday that authorities in the United States have questioned the company about its anti-corruption program and the Foreign Corrupt Practices Act.

The statement referred to “U.S. authorities” and didn’t specify if the requests for information came from the DOJ or SEC or both.

An anonymous source told local publication SvD that both the DOJ and SEC are involved in the investigation.

Ericsson trades on Nasdaq under the symbol ERIC.

The company said it received “a voluntary request” to answer a number of questions from U.S. authorities in March 2013.

Ericsson said Friday,

We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson’s anti-corruption program and questions related to the Foreign Corrupt Practices Act. Ericsson cooperates with U.S. authorities and works diligently to answer the questions.

SvD said Friday the investigation relates to Ericsson’s activities in China.

In February this year, Amsterdam-based VimpelCom paid $397.6 million to resolve an FCPA enforcement action.

The settlement required VimpelCom, one of the biggest telecom companies in the world, to pay a $230.1 million criminal penalty to the DOJ, and $167.5 million in disgorgement and pre-judgment interest to the SEC.

VimpelCom and its Uzbek unit admitted they paid more than $114 million in bribes to a government official in Uzbekistan between 2006 and 2012.

In a parallel enforcement action, Dutch prosecutors penalized VimpelCom $397.5 million for the overseas bribery.

The U.S. enforcement action was the sixth biggest FCPA case of all time.

Ericsson has 115,300 employees in 180 countries, including more than 13,000 in North East Asia. Global revenue last year was about $29 billion.

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Here’s the full text of Ericsson’s June 17, 2016 statement:

Ericsson comments on recent media reports on questions concerning corruption

In March 2013, Ericsson (NASDAQ:ERIC) received a voluntary request from U.S. authorities to answer a number of questions relating to Ericsson’s operations, something we have also confirmed to media in 2013. Ericsson cooperates with U.S. authorities to answer these and additional questions.

While we strive to at all times [to] conduct our business in compliance with applicable laws, matters do arise from time to time as a result of the global nature of our business.

We will not provide any detailed comments on the request as such, but can say that it relates to Ericsson’s anti-corruption program and questions related to the Foreign Corrupt Practices Act. Ericsson cooperates with U.S. authorities and works diligently to answer the questions.

As a listed company, we always follow the requirements to publically disclose any information about events that would have a material impact on the company or its finances. Should such materiality arise, Ericsson will disclose information in accordance with regulatory requirements.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016

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