Two years ago, the SEC alleged that IBM violated the Foreign Corrupt Practices Act (FCPA) by bribing government officials in South Korea and China. Last week the District Court for the District of Columbia issued a final judgment against IBM in settlement of these allegations. The settlement requires IBM to pay $10 million and satisfy reporting requirements for the next two years. The final judgment was entered without IBM admitting or denying the allegations of FCPA violations.
The settlement was two years in the making, since the “court refused to approve the proposed deal unless broad reporting requirements were included.” Presiding Judge Richard Leon “is one of several district court judges who have questioned SEC deals with alleged wrongdoers on the basis that they are too lenient.” Part of the settlement requires IBM to submit annual reports of its efforts to comply with the FCPA, and to report if or when it is “reasonably likely” that IBM has violated the FCPA.
In addition, IBM must inform the SEC if any action or investigation against the company is instigated. This includes being the subject of an enforcement proceeding or a party to a major administrative proceeding by a federal department or agency. It also includes being a party to a major civil suit or the subject of a criminal investigation.
Read the final judgment here.