By Alina Selyukh
WASHINGTON, July 25 A U.S. judge on Thursday
signed off on IBM's 2011 settlement with U.S. regulators over
charges of foreign bribery, wrapping up the latest case that
questioned U.S. authorities' aggressiveness in investigating
U.S. District Judge Richard Leon approved the settlement
between International Business Machines Corp and the
Securities and Exchange Commission after IBM agreed to a
two-year reporting requirement on accounting fraud or bribery as
well as federal investigations.
IBM in March 2011 agreed to pay some $10 million to resolve
SEC charges over improper gifts to government officials in South
Korea and China. The Department of Justice is now investigating
allegations of illegal activity by a former IBM employee in
Poland as well as transactions in Argentina, Bangladesh an
Ukraine, according to IBM's April 30 filing with the SEC.
Leon warned that if any IBM violations land on his desk in
the future, he would be stricter in his review.
"If there's a problem in the next two years, obviously it
won't be a day like today, it won't be a happy day," Leon told
IBM's General Counsel Robert Weber at the court hearing.
IBM neither admitted nor denied the allegations of bribery
in South Korea or China, a common feature in SEC settlements.
"When we receive an allegation of wrongdoing, we investigate
it and take appropriate action," IBM said in a statement on
Thursday while also calling its compliance program "robust" and
welcoming Leon's ruling.
In February, Leon scolded IBM for a "history" of violating
provisions of the Foreign Corrupt Practices Act and "major
payments" to foreign governments, the latest federal judge to
express concerns over U.S. regulators' handling of settlements
with corporations during the past two years.
Numerous federal judges have recently asked whether U.S.
regulators were aggressive enough in responding to corporate
misconduct. The law bars payments to officials of foreign
governments in exchange for business and also requires companies
to maintain accurate books.
Leon's ruling on Thursday required IBM to annually report to
the court and the SEC about its compliance with the foreign
corruption laws and immediately notify them if bribery or
accounting fraud violations have "reasonably likely" happened.
IBM would also have to report within 60 days of discovering
that it is party to any federal investigation, enforcement or
IBM's lawyers at the hearing enumerated steps IBM takes to
internally avoid and pursue violation allegations, including a
confidential reporting system, and said the company's board of
directors has agreed to Leon's reporting requirements.
The case is SEC v. International Business Machines Corp,
U.S. District Court, District of Columbia, No. 11-00563.