On Thursday, U.S. District Judge Richard Leon in Washington gave his approval on a $10 million agreement between IBM and the SEC that had been submitted in March 2011. Though the approval had been kept pending by Leon commenting that he was not going to rubberstamp a settlement, and seeking further documents from IBM. At the end, the settlement was typical – transgressions happily forgotten without the defendant admitting or denying any wrongdoing.
However, the judgment includes a condition that IBM had initially opposed – that the company would have to report to the court and the SEC within sixty days of coming to know that any federal agency has initiated a probe or other enforcement proceeding against it, or it had been made party to any administrative proceeding or civil litigation. The reporting requirements would be in place for the next two years.
The approval of the settlement provides a bit of relief for IBM with new accusations of the company violating the FCPA in Poland, Argentina, Bangladesh and Ukraine raised about three months ago. Currently the DOJ is investigating the allegations.
The original SEC case had raised allegations against IBM of bribing Chinese and South Korean officials to win $54 million in government contracts. The payments were alleged to have been made by employees at three subsidiaries of IBM and at a joint venture of IBM with LG.
During the short hearing, Leon said that he was under the impression that IBM “has learned its lesson and is moving in the right direction to ensure this never happens again.” He also told officials of the company that “it won’t be a happy day,” if the company committed any further violation within the next two years.
Whitney Forster, a spokeswoman for the company said that “IBM and the SEC agreed on a settlement in the matters before this court, and we are pleased the settlement has now been approved.”