Ericsson Attempts To Put A Positive Spin On Monitor Extension (Even Though It Is Not A Positive Development For The Company)
As highlighted in this prior post, in December 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a net $1.06 billion Foreign Corrupt Practices Act enforcement action – the largest of all-time – concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
The DOJ prong of the enforcement action involved a one count criminal information against Ericsson subsidiary Ericsson Egypt Ltd. charging conspiracy to violate the FCPA’s anti-bribery provisions resolved through a plea agreement and a criminal information against Ericsson charging conspiracies to violate the FCPA’s anti-bribery, books and records, and internal controls provisions resolved through a deferred prosecution agreement. The DPA required Ericsson to retain an independent compliance monitor for a three year term. As a condition of resolving a parallel SEC matter, Ericsson was also required to retain a monitor for a three year period.
In October 2021, the DOJ accused Ericsson of breaching its DPA obligations. (See here).
Recently, Ericsson announced “that it has agreed with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) to extend the term of the Company’s Independent Compliance Monitor for one year, to June 2024.”
Former Ericsson Executives Acquitted In Sweden
In December 2019, Swedish telecom company Ericsson resolved a net $1.06 billion Foreign Corrupt Practices Act enforcement action. The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
As to Djibouti, the DOJ alleged that various Ericsson employees “conspired and agreed with others to corruptly provide approximately $2,100,000 in bribe payments to, and for the benefit of, foreign officials in Djibouti, including Foreign Official 1 (described a high-ranking government official in the executive branch of the Djibouti government who had influence over decisions made by a state-owned telecommunications company), Foreign Official 2 (similarly described), and Foreign Official 3 (described as the CEO of the state-owned telecom company), in order to secure an improper advantage in order to obtain and retain business with Telecom Company and to win a contract valued at approximately €20,300,000 with Telecom Company (the “Telecom Company Contract”).”
Earlier this week, four former Ericsson executives were acquitted in Sweden concerning the same core conduct related to Djibouti. (See here and here for media coverage).
This is interesting.
Friday Roundup
Missing evidence, $10, and scrutiny alert.
It’s all here in the Friday roundup.
Missing Evidence?
In 2017 (in connection with an undercover string) the DOJ unsealed criminal charges against Joseph Baptiste (a retired U.S. Army Colonel, practicing dentist, and founder / president of a Maryland-based Haitian focused non-profit) for alleged Haitian bribery. In 2018 the DOJ added criminal charges against Roger Boncy in connection with the same core conduct. (See here).
Scrutiny Updates
Ericsson
In connection with the ongoing saga of Ericsson (see here for a recent post), the company recently disclosed:
“We are currently engaging with the Department of Justice (DOJ) regarding the breach notices it issued relating to the Deferred Prosecution Agreement. The resolution of these matters could result in a range of actions by DOJ, and may likely include additional monetary payments, the magnitude of which cannot at this time be reliably estimated. As this process is ongoing, we remain limited in what we can say about the historical events covered in the Iraq investigation and our ongoing engagement on the matter. We are fully committed to co-operating with the DOJ and our work to further strengthen our Ethics and Compliance program, controls and our culture remains a top priority. It was actually our improved compliance program that allowed us to identify the misconduct in Iraq that started at least back in 2011.”
Friday Roundup
Overheard, interesting and for the reading stack.
It’s all here in the Friday roundup.
Overheard
In connection with the ongoing saga of Ericsson (see here for a recent post) during a recent investor conference call, E. Borje Ekholm (President, CEO and Director) stated: