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, beginning in 2000 and continuing until 2016, Ericsson engaged in a long-running scheme to pay bribes in Djibouti and China, and the company's failure to implement adequate internal controls allowed it to maintain slush funds and enter into sham contracts in Vietnam, Indonesia, and Kuwait. In turn, Ericsson falsified its books and records to cover up the use of third party agents and consultants to make bribe payments to government officials and/or to manage off-the-books slush funds.
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.
On October 22, 2021, Ericsson issued a press release stating that the DOJ had informed the company that the agency had determined that Ericsson breached its obligations under the DPA by failing to provide certain documents and factual information and that Ericsson would have the opportunity to respond in writing to explain the nature and circumstances of such breach as well as how Ericsson would address and remediate the situation.
In a 6-K filed on March 2, 2022, Ericsson disclosed that the DOJ had informed the company the previous day that the disclosure made by the company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient and that the company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA.
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.
On March 2, 2023, the DOJ announced that it had entered into a new plea agreement with Ericsson based on the company's violations of the DPA. Under the terms of the agreement, Ericsson agreed to pay a monetary fine of $727,379,280, which reflected a fine at the midpoint between the low end and the high end of the U.S. Sentencing Guidelines fine range. However, the DOJ credited the $520,650,432 fine previously paid by Ericsson pursuant to the 2019 DPA, which resulted in a remaining criminal penalty of $206,728,848.
In a related proceeding, 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.
