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Enforcement Action Dataset

 

Docket or Case Number:    3-18962

Court:    N/A

Initiation Date:    12/26/2018  Information

Prosecuting Agency:    US Securities and Exchange Commission

Name of Prosecuting Attorneys:   

  • Ernesto Palacios, Senior Counsel, FCPA Unit
  • Thierry Olivier Desmet, Assistant Director, FCPA Unit, SEC Miami
  • Kathleen Strandell, SEC Miami Regional Office

Assisting Agencies:    U.S. Department of Justice , Federal Bureau of Investigation , Brazilian Federal Prosecution Office (Ministerio Publico Federal) , Brazilian Federal Police

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    Unknown

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Centrais Eletricas Brasileiras S.A. (“Eletrobras”) was a Brazilian power generation, transmission and distribution company whose shares were registered with the SEC and traded on the New York Stock Exchange. The Brazilian government owned a 51% stake in Eletrobras and appointed a majority of Eletrobras’s board members.

Eletrobras Termonuclear S.A (“Eletronuclear”) was Eletrobras’s majority-owned nuclear power generation subsidiary.

According to the documents in this case, from approximately 2009 until 2015, former officers at Eletronuclear engaged in a bid-rigging and bribery scheme connected to the construction of a nuclear power plant. Under the scheme, private Brazilian construction companies paid bribes through inflated contracts to the Eletronuclaer officers in order to obtain the contracts for the power plant's construction. In all, the construction companies involved paid the former Eletronuclear officers approximately $9 million.

In a settled administrative proceeding initiated on December 26, 2018, the SEC ordered Eletrobras to cease and desist violations of the books and records and internal controls provisions of the FCPA. Additionally, the SEC ordered Eletrobras to pay a civil fine of $2.5 million.



Country(ies) involved:    Brazil

Sanction to Bribe Ratio:    $2,500,000 / $9,000,000 = 27.78 %

Sanction to Revenue Ratio:    Not Applicable

Sanction to Profit Ratio:    Not Applicable

Number of Related Enforcement Actions (Including This Enforcement Action):    1

Country(ies) involved:    Brazil

Total $ Bribery Payments:    $9,000,000

Total $ Revenue Generated from Bribery:    Unknown

Total $ Profit Earned or Expenses Avoided from Bribery:    Unknown

Total $ Monetary Sanctions:    $2,500,000

Sanction to Bribe Ratio:    $2,500,000 / $9,000,000 = (27.78 %)

Sanction to Revenue Ratio:    Not Applicable

Sanction to Profit Ratio:    Not Applicable

Name:    Centrais Eletricas Brasileiras S.A.

Place of Incorporation:    Brazil

HQ Country(ies):    Brazil

Entity Type:    Public Company

FCPA Claims:    Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A)) ; Internal Controls, Primary, Issuer (15 U.S.C. § 78m(b)(2)(B))

Related Claims:    None

Statutory Basis for FCPA Jurisdiction:    Issuer

Period of Bribery:   2009 - 2015

Total Bribery Payments:    $9,000,000

Total Revenue Generated from Bribery:    Unknown

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Brazil

Officials Potentially Influenced (Name; Title; Organization): 

  • Name Unknown, Officers; Eletrobras Termonuclear S.A

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third-Party Intermediary:    None/Unknown

Type of Bribe:   Money

Cash, Wire or Check:    Not Available

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments made to Electronuclear officers

Period of Bribery:   2009 – 2015

Total Bribery Payments:    $9,000,000

Total Revenue Generated from Bribery:    Unknown

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Brazil

Officials Potentially Influenced (Name; Title; Organization):  

  • Name Unknown, Officers; Eletrobras Termonuclear S.A;

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third Party Intermediary:    None/Unknown

Type of Bribe:   Money

Cash, Wire or Check:    Not Available

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes

Parent:    Centrais Eletricas Brasileiras S.A. (Corporate HQ: Brazil; Place of Incorporation: Brazil; Industry: Utilities)

  • Subsidiary:  Eletrobras Thermonuclear S.A. - Eletronuclear (Corporate HQ: Brazil; Place of Incorporation: Brazil; Industry: )

    • Percentage of Ownership:    99.00 %
    • Direct or Indirect Ownership:    Unknown
    • Parent Had Knowledge of Sub’s Bribery?:    No
    • Subsidiary Expressly Alleged to Be Parent's Agent:    No
    • Parent Liable for Sub Misconduct?:    Yes

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

Re: Centrais Eletricas Brasileiras S.A.

  • Inadequate internal controls or auditing

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Centrais Eletricas Brasileiras S.A.      

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Centrais Eletricas Brasileiras S.A.    

Total Monetary Sanctions for the Action:    $2,500,000

Case Status:    Resolved


Disposition:    Cease and Desist Order

Date of Disposition:    12/26/2018

Centrais Eletricas Brasileiras S.A.

—  Total Monetary Sanctions for Defendant:    $2,500,000

—  Compliance Obligation:    No

—  Reporting Obligation:    No Applicable

—  Admission of Guilt/Acceptance of Responsibility:    No

No Document Title Date Category