Ericsson FCPA resolution (2019) and 2023 guilty plea
- Resolution type
- DPA and subsidiary guilty plea (2019), parent guilty plea after breach (2023), SEC settlement (2019) 1,2 3
- 2019 amounts
- Criminal penalty US$520,650,432 1. SEC disgorgement and prejudgment interest of more than US$539 million 2
- 2023 amount
- Additional criminal penalty of US$206,728,848 3
The 2019 resolution
DOJ announced the resolution on 6 December 2019 1. Ericsson was charged with conspiracies to violate the FCPA anti-bribery, books and records and internal controls provisions 1. The case was filed in the Southern District of New York before Judge Alison J. Nathan 1. Ericsson Egypt Ltd pleaded guilty the same day to one count of conspiracy to violate the anti-bribery provisions 1.
DOJ said Ericsson admitted "a longstanding scheme to pay bribes, to falsify books and records" 1. The conduct ran "beginning in 2000 and continuing until 2016" and involved Djibouti, China, Vietnam, Indonesia and Kuwait, according to DOJ 1.
Amounts and credit
DOJ set a total criminal penalty of US$520,650,432 1. DOJ said it reflected "a 15 percent reduction off the bottom of the applicable United States Sentencing Guidelines fine range" 1. Ericsson received partial cooperation credit 1. DOJ gave its reasons for withholding full credit. Ericsson did not disclose two relevant corruption matters, produced some materials late and did not fully remediate 1.
The SEC said Ericsson agreed to pay more than US$539 million in disgorgement and prejudgment interest 2. The SEC complaint alleged violations of the anti-bribery, books and records and internal controls provisions 2. The SEC release does not state whether Ericsson admitted or denied the SEC's allegations 2. Ericsson agreed to retain an independent compliance monitor for three years 1.
The breach and the 2023 plea
On 2 March 2023 DOJ said Ericsson breached the DPA by "violating the agreement's cooperation and disclosure provisions" 3. DOJ said Ericsson failed to disclose all factual information about the Djibouti and China schemes and other potential FCPA violations, and failed to promptly report conduct related to Iraq 3.
Ericsson agreed to plead guilty to the two counts deferred in 2019 3. DOJ said the additional penalty of US$206,728,848 "includes the elimination of any cooperation credit originally awarded pursuant to the DPA" 3. Ericsson agreed to a one-year extension of the monitor 3. DOJ's case page records the filing on 20 March 2023 in the Southern District of New York and probation through June 2024 4.
What Ericsson said
In a company statement of 2 March 2023, Ericsson said DOJ had notified it of breaches "as previously announced in October 2021 and March 2022" 5. Ericsson said DOJ had not alleged or charged any new criminal misconduct and that the plea covered conduct it admitted under the DPA 5. Chief executive Börje Ekholm said: "Taking this step today means that the matter of the breaches is now resolved" 5. On Iraq, Ericsson said its 2019 investigation found no payments to a terrorist organization 5.
Common questions
Did Ericsson plead guilty?
Yes. Its subsidiary Ericsson Egypt pleaded guilty in 2019 1, and the parent company agreed in 2023 to plead guilty to the two deferred counts after DOJ found a breach 3.
How much did Ericsson pay in 2019?
A US$520,650,432 criminal penalty to DOJ 1 and more than US$539 million to the SEC 2.
Why did DOJ say Ericsson breached the DPA?
DOJ said it failed to disclose information about the Djibouti and China schemes and other matters, and failed to promptly report Iraq-related conduct 3.
How long did the monitorship last?
Three years under the DPA, extended by one year in 2023 1,3. DOJ's case page refers to probation through June 2024 4.
Rules and fees change. Check the official site linked above before you apply or pay. Spotted an error? Email hello@settlementsexplained.org with the official link.
Sources
- U.S. Department of Justice: Ericsson Agrees to Pay Over $1 Billion to Resolve FCPA Case (6 December 2019)
- U.S. Securities and Exchange Commission: SEC Charges Multinational Telecommunications Company With FCPA Violations, 2019-254 (6 December 2019)
- U.S. Department of Justice: Ericsson to Plead Guilty and Pay Over $206M Following Breach of 2019 FCPA Deferred Prosecution Agreement (2 March 2023)
- U.S. Department of Justice, Fraud Section: United States v. Telefonaktiebolaget LM Ericsson case page (updated 18 October 2023)
- Ericsson (company statement): U.S. Department of Justice resolves 2019 Deferred Prosecution Agreement breaches with Ericsson (2 March 2023)
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