International Business Machines Corp. (NYSE:IBM) has agreed to pay $10 million to settle with the U.S. SEC. Apparently IBM bribed officials in China and South Korea for computer contracts according to a source with BusinessWeek.
The company will be paying $5.3 million in disgorgement, $2.7 million in interest, and a $2 million penalty to settle the lawsuit. The SEC alleges that the travel and entertainment bribes took place between 1998 and 2009. These actions were in violation of the Foreign Corrupt Practices Act.
According to the lawsuit, the improper payments were made by employees across three IBM subsidiaries. LG IBM PC, a joint venture between LG and IBM, also had paid bribes according to the lawsuit.
Cash payments made to South Koreans between 1998 and 2003 totaled up to $207,000. IBM had created “slush funds” at the local travel agencies to pay for overseas trips by Chinese government employees.
The case was filed under SEC v. International Business Machines Corp., 11-cv-00563, U.S. District Court, District of Columbia (Washington).