Subscribe to the Finance Headline RSS feed | Subscribe to the Finance Headline feed via EmailSEC, DOJ Announce $95 Million Settlement In Bribery Actions Against Deutsche Telekom, Hungarian Unit
January 5, 2012 in Securities Regulation & Law Report · Leave a Comment
By Joe Lustig
Magyar Telekom, Hungary’s largest telecommunications provider, and majority owner Deutsche Telekom agreed to pay over $95 million to settle charges that they bribed government and political party officials in Macedonia and Montenegro, the Department of Justice and Securities and Exchange Commission announced Dec. 29 (United States v. Magyar Telekom, E.D. Va., No. 1:11-cr-00597-CMH, 12/29/11; SEC v. Straub, S.D.N.Y., 11 Civ. 9645, 12/29/11; SEC v. Magyar Telekom Plc,S.D.N.Y., 11 Civ. 9646, 12/29/11).
The DOJ filed its charges under the Foreign Corrupt Practices Act against Magyar and Deutsche Telekom, Magyar’s majority owner, in the U.S. District Court for the Eastern District of Virginia. In a release, prosecutors said that the companies agreed to pay nearly $64 million in combined criminal penalties as part of a nonprosecution agreement.
Separately, the SEC said that Magyar agreed to settle FCPA chargesagainst it in the U.S. District Court for the Southern District of New York by paying more than $31.2 million in disgorgement and prejudgment interest.
Deutshe Telekom also settled SEC charges of books and records and internal control violations under the FCPA, the commission announced. At the time of the alleged violations, the SEC’s complaint said, the companies’ securities were traded through American Depository Receipts listed on the New York Stock Exchange and registered with the commission under 1934 Securities Exchange Act Section 12(b).
Meanwhile, SEC charges are pending in the Southern District of New York against three former Magyar executives whom the commission accused of orchestrating, executing, and approving the bribery scheme. They are Elek Straub, former chairman and chief executive officer, and Andras Balogh and Tamas Morvai, two former senior executives in the company’s strategy department.
The agency said it is seeking disgorgement, penalties, and permanent injunctions against them…
