US SEC opens investigation against Ericsson over 2019 Iraq bribery report

STOCKHOLM, June 9 (Reuters) – Ericsson (ERICb.ST) said on Thursday the U.S. securities regulator had opened an investigation into matters described in the company’s 2019 Iraq investigation report.

The Swedish telecom equipment maker said it was cooperating fully with the U.S. Securities and Exchange Commission (SEC) and it was too early to determine or predict the outcome of the investigation.

Ericsson revealed in February that an internal investigation revealed he may have made payments to the Islamic State militant group in Iraq – misconduct which he said “began at least in 2011”.

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The US Department of Justice (DoJ), which fined Ericsson in 2019 for settling another corruption case, is also investigating the company’s handling of the investigation and is expected to fine Ericsson. ‘company. Read more

As part of this settlement, Ericsson had agreed to engage an independent compliance monitor for a period of three years.

“In these cases, it is not uncommon for multiple branches of US authorities to be involved and we do not expect this to materially alter any final sanction and/or settlement,” according to Mads Rosendal, analyst at Danske Bank. Credit. To research.

“This could, however, lead to further delays now that more stakeholders will be involved.”

A spokesperson for the SEC did not immediately respond to a request for comment.

US agencies are investigating companies for violations of the Foreign Corrupt Practices Act (FCPA) which governs a US person or company paying money or anything of value to a foreign official for the purpose of obtaining business.

The DoJ essentially manages the criminal aspects of the investigation and the SEC the civil aspect. When an amicable settlement is concluded with a company, the amount of the fine is divided between the agencies.

In 2020, Goldman Sachs Group Inc (GS.N) agreed to pay more than $1 billion to settle charges brought by the SEC for violating FCPA provisions under the 1MDB bribe scheme from Malaysia.

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Reporting by Supantha Mukherjee in Stockholm, additional reporting by Katanga Johnson in Washington Editing by Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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