Record $279 Million Whistleblower Award Went to a Tipster on Ericsson

Discussion in 'Wall St. News' started by ETJ, May 27, 2023.

  1. ETJ

    ETJ

    Record $279 Million Whistleblower Award Went to a Tipster on Ericsson
    The largest-ever award in the SEC’s cash-for-tips program was related to Ericsson’s bribery case

    By Mengqi Sun
    May 26, 2023 12:03 am ET
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    Ericsson’s headquarters in Stockholm. The DOJ alleged in 2019 that the company conspired to make illegal payments to win business in five countries. PHOTO: LARS SCHRODER/AGENCE FRANCE-PRESSE/GETTY IMAGES
    The record $279 million whistleblower award issued by the Securities and Exchange Commission earlier this month stemmed from a bribery case against telecommunications company Ericsson.

    The award from the SEC’s cash-for-tips program was related to the $1.1 billion settlement the Swedish company reached with U.S. authorities in 2019 over allegations it conspired to make illegal payments to win business in five countries, in violation of U.S. antibribery laws, according to people familiar with the matter.


    The SEC didn’t name the enforcement action underlying the award and didn’t identify the tipster, in keeping with whistleblower protection rules that prevent the regulator from divulging this information to the public.

    A series of alleged missteps since 2019 led Ericsson in March to agree to plead guilty and pay an additional fine of about $207 million to settle allegations it breached the deferred prosecution agreement it reached in 2019 with the Justice Department.

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    Under SEC rules, a whistleblower can receive an award of between 10% and 30% of the fines collected in SEC civil-enforcement actions and related actions from other enforcement agencies resulting from a tip, assuming the SEC collects more than $1 million.

    A spokesman for the SEC declined to comment. A spokesman for Ericsson also declined to comment. A spokesman for the U.S. Attorney’s Office for the Southern District of New York, which brought the charges against Ericsson, didn’t immediately respond to a request for comment.

    Two other individuals also separately applied to receive a whistleblower award from the SEC, but their claims were denied. In a publicly available but highly redacted version of the SEC order, the commission said the claimants’ information didn’t help the agency’s enforcement action.

    The $279 million whistleblower award topped the previous record, a $114 million whistleblower award the SEC issued to an individual in October 2020.

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    Prosecutors from the Southern District of New York in Manhattan who brought the charges in 2019 said that Ericsson’s wrongdoing occurred in Djibouti, China, Vietnam, Kuwait and Indonesia from 2000 to 2016. The SEC said in its complaint that Ericsson subsidiaries won business worth about $427 million by using third parties to bribe officials in Saudi Arabia, China and Djibouti.

    The deferred prosecution agreement in 2019 included a $520 million criminal penalty and $540 million disgorgement of illicit profits and required Ericsson to retain a compliance monitor for three years and to cooperate in related probes.

    Prosecutors said in March that the company failed to comply with its settlement obligations, including full cooperation with U.S. authorities and failures to disclose evidence and allegations.

    An investigation into Ericsson’s historic operations in Iraq is continuing. The company has said it is cooperating with the probe.

    The monetary sanctions against Ericsson are among the highest ever imposed by the U.S. government for violations of the Foreign Corrupt Practices Act. The FCPA, a U.S. antibribery law, prohibits the use of bribes to foreign officials to win or keep business.
     
    Nobert likes this.
  2. d08

    d08

    Americans fining European companies for business practices in 3rd countries. What a joke.
    The named countries are based on corruption. So if Ericsson doesn't pay up, someone else will. How do they think Chinese companies do business in Southeast Asia and India, it's all dark money.
     
  3. M.W.

    M.W.

    You mean the same as American companies being 100% complicit in handing out sensitive and private user information each single time US authorities ask while accusing Chinese companies like tiktok to do the same for their masters? It's this sort of hipocricy that makes many around the world lose trust and faith in the American claims of goodwill. And we are clearly not talking about averting acts of terror here.

    https://www.theregister.com/2023/05/25/pypi_us_government_subpoena/

    Either one must stick to extra high standards and work all the harder to compete, or otherwise admit to be a willing participant in dirty games. What gets me are the sharades political and corporate America are playing and what amuses me is that the naivety of the average American falls for this crap time and again.

     
    Last edited: May 27, 2023
    zdreg, VicBee and d08 like this.
  4. ph1l

    ph1l

    I was curious how the SEC is allowed to do this, so ...

    How can SEC fine a Swedish company for paying bribes in China, Saudi Arabia, and Djibouti?
     
    d08 likes this.
  5. What? Why would we de-fang our own team?

    The U.S. collected well over a billion dollars for our own coffers. They pay or they can’t do business here.

    Why leave money laying there on the ground?
     
  6. ETJ

    ETJ

    They maintain a listing on NASDAQ - that makes them subject to domestic securities laws.
     
    wilburbear likes this.
  7. TheDawn

    TheDawn

    I am surprised that Ericsson actually paid up. If SEC has done this to companies in all of the countries that Ericsson had made "illegal payments" to, all it would've received would've been a big middle finger. LOL I mean there were Chinese companies that brazenly conned hundreds of millions of dollars from American investors and pension funds with fraudulent financial statements and SEC did shit and now it decides to go after a company just because it bribed too well? LOL Ericsson is an energy company. It's not even in SEC's jurisdiction. LOL
     
    d08 likes this.
  8. VicBee

    VicBee

    Just imagine if Chinese companies imposed fines on US companies "awarded" business in South America...
     
    M.W. and d08 like this.
  9. d08

    d08

    Is that the actual case? Then it would clearly make sense to delist.

    Let's not ask how anyone, including US companies operate in China. It's clearly all above board, no red envelopes exchange hands, not even once.
     
    VicBee and M.W. like this.
  10. ETJ

    ETJ

    No question US firms are at a disadvantage, but the two wrongs might a right argument is bullshit!
     
    #10     May 28, 2023
    wilburbear likes this.