Telefonaktiebolaget LM Ericsson (“Ericsson”) was a multinational networking and telecommunications equipment and services company headquartered in Sweden. Ericsson’s common shares were registered with the SEC and traded on the NASDAQ.
Ericsson operated through a variety of subsidiaries including Ericsson AB (“EAB”), Ericsson Egypt Ltd, "Ericsson China" (the collective name for Ericsson (China) Company Ltd., Ericsson (China) Communications Co., Ltd., Ericsson Hong Kong, and majority-owned joint venture Nanjing Ericsson Panda Communications Company Ltd.), PT Ericsson Indonesia, Ericsson Vietnam Co. Ltd., and Ericsson Resource & Competence Center Sdn. Bhd. (“Ericsson Malaysia”).
According to the documents in this case, between 2011 and 2017, Ericsson engaged in a large-scale bribery scheme involving the use of sham consultants to secretly funnel money to government officials in multiple countries. Specifically, the SEC alleged that Ericsson subsidiaries paid approximately $62 million in bribes to government officials through third parties in Djibouti, Saudi Arabia, and China to obtain business, and Ericsson made approximately $427 million in profits from that business. Ericsson made many of the payments through third party consultants who had connections to public officials, and/or directly paid for travel and entertainment expenses for foreign officials and sometimes their families in order to influence their decision-making. Additionally, Ericsson subsidiaries used consultants in Vietnam and Indonesia to create slush funds of approximately $56 million that were used to make payments to unknown recipients. Ericsson subsidiaries also made approximately $31.5 million in payments in China pursuant to sham service provider agreements under which no legitimate services were provided. Finally, Ericsson also made a payment in the amount of $450,000 through a subsidiary to a Qatari consulting company in connection with a bid tender in Kuwait. The consulting company allegedly provided an EAB employee with inside information such as competitor bid information about the Kuwait tender.
On December 6, 2019, the SEC filed a civil complaint in the Southern District of New York against Ericsson alleging violations of the anti-bribery, books and records, and internal controls provisions of the FCPA. On December 11, 2019, the SEC filed a consent agreement with the court. Under the terms of the consent, Ericsson agreed to be enjoined from future violations of the FCPA, to pay disgorgement of $458,380,000 plus prejudgment interest of $81,540,000, and to retain an independent compliance monitor for a term of three years.
In a company press release issued on December 14, 2022, Ericsson said that it had agreed to a one year extension through June 2024 to the corporate monitorship imposed in the 2019 settlement.
In a related proceeding on December 6, 2019, the DOJ simultaneously filed in the Southern District of New York an Information against Ericsson alleging a conspiracy to violate the anti-bribery, books and records, and internal controls provisions of the FCPA, a superseding Information against Ericsson Egypt alleging a conspiracy to violate the anti-bribery provisions of the FCPA, and a deferred prosecution agreement with Ericsson resolving the case. Under the terms of the DPA, Ericsson agreed to pay a total of $520,650,832 in monetary sanctions, which includes a judgment of $9,520,000 against Ericsson Egypt and a mandatory $400 assessment, to continue to implement its improved anti-corruption compliance policies and procedures, and to hire an independent compliance monitor for a term of three years.
