Tech News Summary:
- Ericsson has been ordered by the US Securities and Exchange Commission (SEC) to pay a record-breaking $279 million whistleblower award related to a bribery case against the Swedish telecommunications company. Ericsson had agreed in December 2019 to pay over $1 billion to resolve an investigation into alleged corruption, which included admission to engaging in illicit activities spanning from at least 2000 to 2016 in several countries, including Djibouti, Vietnam, and Kuwait. The payout followed allegations that Ericsson made payments to the Islamic State militant group in Iraq in 2019, which resulted in an SEC investigation into Ericsson’s behaviour in Iraq in June 2022.
- Ericsson agreed to pay a $207 million fine to the DOJ for violating anti-bribery provisions of the Foreign Corrupt Practices Act. The SEC’s whistleblower programme grants individuals who provide tips about securities law infractions resulting in successful enforcement actions exceeding $1 million a chance to receive between 10% and 30% of collected fines. This latest award exceeds the previous record of $114 million issued by the SEC in October 2020, and several individuals applied for whistleblower awards under the Ericsson case, but they were denied.
- This new report highlights the importance of whistleblowers, who play a crucial role in uncovering corporate wrongdoing, according to sources cited by Silicon UK Networks & Carriers. “Such rewards would motivate more individuals who have knowledge of securities law infractions to come forward and report them, leading to a more clear and responsible corporate scenario,” they said.
In a groundbreaking legal case, a former employee of telecommunications giant Ericsson has been awarded a record-breaking $279 million for blowing the whistle on the company’s corrupt practices.
The whistleblower, identified only as John Doe, revealed back in 2017 that Ericsson had engaged in a decade-long scheme to bribe government officials in multiple countries to secure lucrative contracts. This illegal behavior allowed the company to gain an unfair advantage over competitors and defraud taxpayers out of millions of dollars.
Doe’s tip-off triggered a massive investigation by U.S. authorities and ultimately led to Ericsson paying $1.06 billion in fines in 2019 to settle charges of violating the Foreign Corrupt Practices Act.
But Doe didn’t stop there. He filed a lawsuit against Ericsson claiming that he had suffered retaliation and wrongful termination after he raised the alarm about the bribery scheme. This lawsuit was settled in September 2020 with Ericsson agreeing to pay $10 million to Doe and making a commitment to strengthen its whistleblower protection policies.
Now, Doe has received a massive award from the U.S. Securities and Exchange Commission (SEC) for his role in bringing Ericsson’s illegal conduct to light. The $279 million payout is the largest ever made by the SEC under its whistleblower program, which was established as part of the 2010 Dodd-Frank Act to incentivize people to report securities violations.
In a statement, the SEC said that Doe’s “information and assistance were of crucial importance” in the investigation and that his award was meant to “encourage whistleblowers to come forward with valuable information”.
Doe’s lawyers have praised the SEC’s decision, saying that it sends a powerful message to corporations that engaging in illegal activity will not go unpunished. Ericsson has not yet commented on the award.