The corruption cases databases are a product of the staff of the International Bank for Reconstruction and Development / The World Bank. It is intended for general information purposes only. The findings, interpretations, and conclusions expressed in the Database do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Neither the World Bank Group nor its officers or employees shall be liable for any losses that may result directly or indirectly from the use of or reliance upon such information.
International Business Machines Corporation (IBM) / 2011 Settlement (South Korea and China)
International Business Machines (South Korea and China)
Securities and Exchange Commission
China, South Korea
Consent to Final Judgment
Disgorgement of Profits, Prejudgment Interest, Civil Penalty
Falsification of books and records, Internal controls violation
No admission or denial of allegations
On March 18, 2011, the US Securities and Exchange Commission filed a settled civil complaint after International Business Marchines Corporation, charging the company with violation of the books and records and internal controls provisions of the Foreign Corrupt Practices Act. The SEC alleged (1) in South Korea, from 1998-2003, employees of IBM Korea, Inc., an IBM subsidiary and LG IBM PC Co., Ltd., a joint venture in which IBM held a majority interest, paid cash bribes (approximately $135,558 by IBM-Korea and $71,599 by LG-IBM Korea) and provided improper gifts and payments of travel and entertainment expenses to various government officials in South korea in order to secure the sale of IBM products. The payments were alleged to have been made to "South Korean Government Entities"(SKGE) as SKGE 1, SKGE 2, SKGE 3, SKGE 3, SKGE 4, SKGE 5 and SKGE 6; (2) in China, between 2004 to early 2009, IBM China, a Hong Kong company owned by IBM, employees created slush funds at local travel agencies in China that were used to pay for overseas and other travel expenses incurred by Chinese government officials, and created slush funds at its business partners to provide a cash payment and improper gifts such as cameras and laptops to Chinese government officials. The complaint does not identify the involved Chinese officials. (Source: Securities and Exchange Commission v. International Business Machines Corporation, Case No. 1:11-cv-00563 (D.D.C.), Complaint filed March 18, 2011.)
Securities and Exchange Commission v. International Business Machines Corporation, Case No. 1:11-cv-00563 (D.D.C.), Complaint filed March 18, 2011, accessed at http://www.sec.gov/litigation/complaints/2011/comp21889.pdf; US Securities and Exchange Commission, Litigation Release No. 21889 / March 18, 2011, "IBM TO PAY $10 MILLION IN SETTLED FCPA ENFORCEMENT ACTION," accessed at http://www.sec.gov/litigation/litreleases/2011/lr21889.htm
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