SEC, DOJ Push Europe to Freeze $1 Billion in FCPA Probe of Telecoms

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A bribery investigation into the acquisition of business in Uzbekistan by mobile telecommunications businesses has led the U.S. to request asset freezes in Europe of more than $1 billion, according to the Wall Street Journal today. The companies at issue in the joint SEC and DOJ probe are Vimpelcom, Mobile Telesystems and TeliaSonera.

The law at issue is the Foreign Corrupt Practices Act. MBT and VIP fall within the law and are both regulated by the SEC because they have American Depository Receipt Shares trading on U.S. stock exchanges. Mobile Telesystems is an ADR trading on the New York Stock Exchange under the symbol MBT. Vimpelcom has an ADR trading on the NASDAQ under the stock ticker VIP. TeliaSonera delisted its securities about a decade ago but still may be covered under the FCPA’s various requirements for application to a company.

The allegations involve money funneled to a network controlled by the eldest daughter of the Uzbek President. Uzbekistan is a former Soviet Republic located in Central Asia near the Caspian Sea. According to media reports concerning the U.S. investigation, his daughter helped three companies gain access to the telecommunications market of 30 million people and received bribes through a network of companies run by intermediaries.

The U.S. investigation was disclosed last year. Various European authorities are also investigating the suspected corruption. The U.S. has asked Sweden and Switzerland to freeze assets held by parties being investigated. The U.S. is expected to also ask Ireland, Belgium and Luxembourg to freeze bank assets held in these countries.

Although there are no indications that there is a whistleblower in this case, this is exactly the type of case that might be brought based on information provided by a SEC whistleblower under the program established by Dodd-Frank.

Do you have questions about this area of the law? We have put together an informational guide for FCPA whistleblowers. If you have questions after reviewing it, one of our FCPA whistleblower attorneys will answer any remaining questions. We can assist you in reporting your evidence of bribery by a publicly traded company or other covered entity to the U.S. Government. Please contact an attorney via our contact form or call 1-800-590-4116.

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