Ericsson Reaches Resolution on U.S. Investigations

Ericsson has entered into a three-year Deferred Prosecution Agreement (DPA) with the U.S. Department of Justice to resolve criminal charges related to violations of the Foreign Corrupt Practices Act (FCPA). This relates to accounting violations of the FCPA in five countries including in Djibouti where there is also a charge of bribery.

In the agreement, the DOJ agrees to defer the prosecution of those charges and to have them dismissed at the end of the term in exchange for Ericsson complying with the conditions of the DPA. Conditions include a payment by Ericsson of a fine of $520,650,432. As part of the resolution with the DOJ, Ericsson's Egyptian subsidiary has entered a guilty plea to the bribery charge in Djibouti.

Separately, Ericsson agreed to resolve civil charges brought by the Securities and Exchange Commission relating to allegations of violations of the bribery and accounting provisions of the FCPA. Ericsson agreed to the entry of a judgment enjoining it from future violations of the FCPA and it agreed to pay a financial sanction of $458,380,000, plus pre-judgment interest of $81,540,000.

As part of the settlement, Ericsson has agreed to engage an independent compliance monitor for a period of three years while the Company continues to undertake significant reforms to strengthen its Ethics & Compliance program. The combined payment of $1.06 billion is fully covered by the provision taken in the last business quarter.