SEC sues IBM over China, South Korea alleged bribes

SEC sues IBM over China, South Korea alleged bribes

Summary: The Securities and Exchange Commission sued IBM for allegedly bribing South Korean and Chinese government officials.

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The Securities and Exchange Commission on Friday sued IBM for allegedly bribing South Korean and Chinese officials.

According to the SEC complaint, posted by the Wall Street Journal, IBM units allegedly bribed these government officials for more than a decade. Bribes included cash, gifts and travel.

IBM agreed to pay $10 million to settle the civil charges without admitting or denying guilt. The settlement is pending court approval.

Among the key details:

  • From 1998 to 2003, employees of IBM Korea and LG IBM PC, a joint venture where IBM owned a majority interest, paid government officials $207,000 in bribes.
  • From 2004 to early 2009, more than 100 employees in various IBM China units handed out improper gifts.
  • IBM lacked the internal processes to police these employees. The alleged bribes were recorded as regular expenses.

Topics: Enterprise Software, Hardware, IBM, Legal

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14 comments
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  • M$ is next!

    the bribes paid by M$ are in the billions!
    Linux Geek
    • Now we see how Linux "grows"

      @Linux Geek <br>I guess Linux really IS a money making OS - IBM will pay you to use it!<br><br>AWSOME!
      Will Farrell
  • But IBM admitted guilt

    by agreeing to pay $10 million to settle the civil charges... Or is the $10 million just another bride to SEC to not pursue the matter
    iPad-awan
    • RE: SEC sues IBM over China, South Korea alleged bribes

      @iPad-awan HA HA! I guess SEC wanted a piece of the action...
      happyharry_z
    • Not a bad idea

      @iPad-awan
      As long as the bribes and fines are less then the income, its a win for IBM
      John Zern
    • Precisely...

      @iPad-awan
      ...why I think the "neither admitting nor denying guilt" dodge should be disallowed. Either the defendant is guilty and should be punished, or not guilty and should be exonerated.
      John L. Ries
    • RE: SEC sues IBM over China, South Korea alleged bribes

      @iPad-awan "Or is the $10 million just another bride to SEC to not pursue the matter "

      I think not. It's either settle the mater out of court or let the lawyers have a field day defending them while charging them 100 mega$ to 10 Giga$.

      Assuming you had the $$$ which would you do?

      Unless when they were passing out brains and the few nerve cells you had miss took it as trains, and you said "no, I ain't going on a long trip. I'll just take a car."
      Me_too
  • Brother Love's Traveling Salvation Show

    Well, aren't we just the purest, most corruption-free country on Earth. We make our own companies pay our government officials if our government officials catch them making payments to some other country's government officials.

    I am shocked -- I say SHOCKED -- to learn that there are bribes in China.
    Robert Hahn
  • RE: SEC sues IBM over China, South Korea alleged bribes

    Unfortunately if you step outside the USA or Europe bribery is a standard business practice. No one likes it but companies that don't participate don't win the contracts.
    AndyPagin
    • RE: SEC sues IBM over China, South Korea alleged bribes

      @AndyPagin
      hitting the nail on the head there...
      I am suprised that anyone could possibly think bribes were not in place with every large company that is doing business outside of america
      aiellenon
  • RE: SEC sues IBM over China, South Korea alleged bribes

    "The alleged bribes were recorded as regular expenses."
    Oh, sorry. Let's see... which column of the spreadsheet is for "bribes and corruption? Really? Maybe they should have marked them down under advertizing and marketing.
    bobatwork
  • RE: SEC sues IBM over China, South Korea alleged bribes

    what were the bribes for? and uhm, who cares?
    Mattwm
  • RE: SEC sues IBM over China, South Korea alleged bribes

    Yep another case where no one goes to jail. But if you or I did it, we would be in the Federal Pen for 20 years! Isn't it time we got back to democracy in this country where the rights of the individual mattered and the US stop protecting big business.
    Dalece
  • RE: SEC sues IBM over China, South Korea alleged bribes

    What is it that the SEC does not understand about bribes in China and South Korea being the only way to do business there?

    What is it that IBM does not understand about bribes can not be written off as expenses?
    Me_too