The U.S. Securities and Exchange Commission (SEC) recently announced that a Brazilian-based petrochemical manufacturer whose stock trades in the U.S. markets has agreed to settle charges that it created false books and records to conceal millions of dollars in illicit bribes paid to Brazilian government officials to win or retain business.
In a global settlement with the SEC, U.S. Department of Justice, and authorities in Brazil and Switzerland, Braskem S.A. (NYSE: BAK) has agreed to pay $957 million.
The agency alleged that Braskem made roughly $325 million in profits through bribes paid through intermediaries and off-book accounts managed by a private company that was Braskem’s largest shareholder.
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Also the bribes were paid to a government official at Brazil’s state-controlled petroleum company as well as Brazilian legislators and political party officials.
The company has agreed to pay $325 million in disgorgement, including $65 million to the SEC and $260 million to Brazilian authorities. Braskem has agreed to pay more than $632 million in criminal penalties and fines. The company must retain an independent corporate monitor for at least three years.
It is worth noting that the SEC’s investigation is still continuing.
Stephanie Avakian, Deputy Director of the SEC Enforcement Division, commented:
As alleged in our complaint, Braskem lacked the internal controls to prevent its use of third parties, off-book accounts, and other intermediaries to bribe government officials in Brazil during an eight-year period. Braskem’s misconduct was exposed through the investigative work of authorities in three countries.
Shares of Braskem were last trading up about 3.6% at $20.45, with a consensus analyst price target of $19.90 and a 52-week trading range of $10.82 to $20.45.
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