Petrochemical Manufacturer Braskem S.A. to Pay $957 Million to Settle FCPA Charges
The Securities and Exchange Commission today 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. agreed to pay $957 million.
The SEC’s complaint alleges that Braskem made approximately $325 million in profits through bribes paid through intermediaries and off-book accounts managed by a private company that was Braskem’s largest shareholder. Bribes were paid to a government official at Brazil’s state-controlled petroleum company as well as Brazilian legislators and political party officials.
“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,” said Stephanie Avakian, Deputy Director of the SEC Enforcement Division. “Braskem’s misconduct was exposed through the investigative work of authorities in three countries.”
Braskem agreed to pay $325 million in disgorgement, including $65 million to the SEC and $260 million to Brazilian authorities. Braskem 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.
The SEC’s investigation is continuing. It is being conducted by Ernesto Palacios and Thierry Olivier Desmet of the FCPA Unit with assistance from David S. Johnson and Fernando Torres, and supervised by Kara Brockmeyer, Chief of the FCPA Unit. The SEC appreciates the assistance of the Department of Justice Criminal Division’s Fraud Section, the Federal Bureau of Investigation, the Brazilian Federal Prosecution Service, the Brazilian Federal Police, and the Office of the Attorney General in Switzerland.