Settlements

ST-4
ABB Ltd. (Matter #15)
ABB Ltd. (Matter #15)
United States
Securities and Exchange Commission
Mexico, Iraq (UN Oil-for-Food)
2010
09/29
Unknown
Legal Person
Civil
Consent to Permanent Injunction
Disgorgement of Profits, Prejudgment Interest, Civil Penalty
$39,314,262.00
$17,141,474
$5,662,788
$16,510,000
$0
Art.16, Art.26
Art. 1, Art. 2, Art. 8
Bribery of foreign officials, Books and records violations, Internal controls violations
No admission or denial of alleged offenses
Yes
According to the Litigation Release by the Securities and Exchange Commission, "The SEC alleges that ABB, through its subsidiaries, paid bribes to government officials in Mexico to obtain business with government owned power companies, and paid kickbacks to the former regime in Iraq to obtain contracts under the United Nations Oil for Food Program. As alleged in the complaint, ABB's subsidiaries made at least $2.7 million in illicit payments in these schemes to obtain contracts that generated more than $100 million in revenues for ABB. In the Mexican bribery scheme, the SEC alleges that from 1999 through 2004, ABB Network Management ("ABB NM"), a business unit within ABB's U.S. subsidiary, ABB, Inc., bribed officials in Mexico to obtain and retain business with two government owned electric utilities, Comision Federal de Electricidad ("CFE") and Luz y Fuerza del Centro ("LyFZ"). [ ] The SEC further alleges that from approximately 2000 to 2004 ABB participated in the United Nations Oil for Food Program (the "Program"). [ ] According to the complaint, ABB participated in the Program through six subsidiaries: ABB Near East Trading Ltd. ("ABB Jordan"), ABB Automation, ABB Industrie AC Machines and ABB Solyvent-Ventec (collectively referred to as "ABB France"), ABB AG ("ABB Austria"), and ABB Elektrik Sanayi AS ("ABB Turkey"). The SEC alleges that these subsidiaries developed various schemes to pay secret kickbacks to Iraq to obtain contracts under the Program. ABB's Jordanian subsidiary acted as a conduit for other ABB subsidiaries by making the kickback payments on their behalf. Some of the kickbacks were made in the form of bank guarantees and cash payments. ABB improperly recorded the kickbacks on its books as legitimate payments for after sales services, consultation costs, and commissions." (Source: US Securities & Exchange Commission, Litigation Release No. 21673 / September 29, 2010, U.S. Securities and Exchange Commission v. ABB Ltd, Civil Action No. 1:10-CV-01648 (DDC) (PLF), "SEC Charges ABB for Bribery Schemes in Mexico and Iraq - ABB to Pay $39 Million in Disgorgement and Civil Penalties.")