WASHINGTON (Legal Newsline) –
The Securities and Exchange Commission (SEC) announced Dec. 21 that Braskem
S.A., a Brazil-based petrochemical manufacturer whose stock trades in the
U.S. markets, agreed to settle allegations of creating false books and records.
According to the SEC, the
company used these false records to conceal millions of dollars worth of
illicit bribes paid to Brazilian government officials to win or retain
business. Braskem purportedly made $325 million in profits through bribes to a
government official at Brazil’s state-controlled petroleum company.
“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.”
To settle the charges,
Braskem agreed to a $957 million penalty. This includes $325 million in
disgorgement - $65 million to the SEC and $260 million to Brazilian
Handling the case for the SEC
are Ernesto Palacios and Thierry Olivier Desmet of the FCPA Unit, with
assistance from David S. Johnson and Fernando Torres.