SEC settles for $400,000 with former Magyar Telekom executives for alleged violations

By Mark Iandolo | May 3, 2017

WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced April 24 that the two former executives at Hungarian-based telecommunications company Magyar Telekom will a pay a total of $400,000 to settle allegation of violating the Foreign Corrupt Practices Act (FCPA).

“The executives in this case were charged with spearheading secret agreements with a prime minister and others to block out telecom competitors,” said Stephanie Avakian, acting director of the SEC’s Division of Enforcement.  “We persevered in order to hold these overseas executives culpable for corrupting a company that traded in the U.S. market.”

In December 2011, Magyar Telekom paid $95 million in penalties to resolve allegations it bribed officials in Macedonia and Montenegro to win business. In that case, the SEC had also charged Elek Straub, the former CEO, and Andras Balogh, the former chief strategy officer. According to the SEC, these two executives were pivotal in orchestrating a scheme for funneling corrupt payments. Straub agreed to a $250,000 penalty while Balogh will pay $150,000.

Handling the case for the SEC were by Robert I. Dodge, Thomas A. Bednar and John D. Worland Jr.  The case was first looked into by Adam J. Eisner and supervised by Charles E. Cain, deputy chief of the Enforcement Division’s FCPA unit.

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