Ericsson Shares Fall Following Violation of DOJ Agreement

By Benzinga
Benzinga
Benzinga
October 24, 2021 Updated: October 24, 2021

U.S. prosecutors determined Telefonaktiebolaget LM Ericsson violated a $1.06-billion settlement agreement reached in 2019 over bribery allegations in five countries.

The U.S. Justice Department (DOJ) intimated that Ericsson breached the agreement by failing to provide certain documents and information related to the settlement, The Wall Street Journal reports.

Ericsson agreed to continue to cooperate with the DOJ.

In 2019, Ericsson reached a deal with the DOJ to resolve bribery allegations that stretched between 2000 and 2016 in Djibouti, China, Vietnam, Kuwait, and Indonesia.

The deal, known as a deferred prosecution agreement, suspended criminal charges of conspiracy to violate the Foreign Corrupt Practices Act, under the condition that Ericsson undertakes specific reforms and continues cooperating with prosecutors for three years.

A subsidiary, Ericsson Egypt Ltd., also pleaded guilty.

Ericsson also entered into a parallel agreement with the U.S. SEC for allegedly using third parties to bribe officials in Saudi Arabia, China, and Djibouti.

The penalties imposed under the two deals were among the highest ever levied for violations of the FCPA.

Price Action

ERIC shares were down 2.89 percent at $11.58 Friday afternoon.

By Anusuya Lahiri

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