The largest-ever award in the Security and Exchange Commission’s cash-for-tips program was related to Ericsson’s bribery case.
Did you hear about the recent whistleblower award issued by the Securities and Exchange Commission? It was a whopping $279 million! The award came from a bribery case against Ericsson, a telecommunications company that allegedly made illegal payments to win business in five countries. The case was a big deal and made headlines around the world.
According to insiders, the SEC awarded money to a Swedish company as part of their cash-for-tips program. The company had previously settled for $1.1 billion with U.S. authorities in 2019 over allegations of violating antibribery laws by making illegal payments to win business in five countries.
It’s essential to follow the rules for protecting whistleblowers, which means that the SEC can’t reveal who reported misconduct or what action was taken to receive a reward. It’s unfortunate that Ericsson has had some alleged missteps since 2019. As a result, they agreed to plead guilty and pay a fine of $207 million to the Justice Department for violating the deferred prosecution agreement they reached in 2019.
According to SEC regulations, individuals who report wrongdoing can potentially receive a percentage of the fines collected by the SEC and other enforcement agencies. This reward can range from 10% to 30%, but it only applies if the SEC manages to collect over $1 million.
The SEC and Ericsson declined to comment, and the U.S. Attorney’s Office for the Southern District of New York hasn’t responded yet. Two other individuals applied for whistleblower awards, but their claims were denied as they didn’t provide helpful information. The SEC recently awarded a record-breaking $279 million to a whistleblower, surpassing the previous record of $114 million from October 2020.
According to prosecutors from the Southern District of New York in Manhattan, Ericsson was charged in 2019 for wrongdoing in Djibouti, China, Vietnam, Kuwait, and Indonesia from 2000 to 2016. The SEC complaint stated that Ericsson’s subsidiaries won business worth around $427 million by using third parties to bribe officials in Saudi Arabia, China, and Djibouti.
Ericsson entered into a deferred prosecution agreement in 2019 which involved paying a $520 million criminal penalty and a $540 million disgorgement of illicit profits. As a part of the agreement, Ericsson has to work with a compliance monitor for three years and help in related investigations.
According to prosecutors, the company did not fulfill its settlement obligations, which included cooperating with U.S. authorities and disclosing evidence and allegations. This was reported in March.
I wonder what the investigation into Ericsson’s past operations in Iraq has uncovered so far. It’s good to hear that the company is cooperating with the probe.
The U.S. government has taken strong action by imposing some of the highest monetary sanctions ever against Ericsson for violating the Foreign Corrupt Practices Act. This law prohibits the use of bribes to foreign officials in order to win or maintain business. By enforcing this law, the U.S. government is ensuring fair competition and integrity in business practices.