Two former executives at Hungarian-based telecommunications company Magyar Telekom agreed to pay financial penalties and accept officer-and-director bars to settle a previously filed SEC case alleging violations of the Foreign Corrupt Practices Act.
The case, SEC v. Straub, stems from a lawsuit filed by the SEC in December 2011 against former Magyar Telekom CEO Elek Straub, chief strategy officer Andras Balogh, and Tamas Morvai, former director of business development and acquisitions, over allegations that they bribed government and political party officials in Macedonia and Montenegro in 2005 and 2006 to win business and shut out competition in the telecommunications industry.
The SEC also charged Magyar Telekom’s parent company, Deutsche Telekom, with books and records and internal controls violations of the FCPA. Magyar Telekom and Deutsche Telekom agreed to a total $95.2 million settlement with the SEC and Justice Department to resolve the civil and criminal charges.
Straub, who was set to stand trial with Balogh in April, has agreed to pay a $250,000 penalty, and Balogh has agreed to pay a $150,000 penalty. Both executives agreed to a five-year bar from serving as an officer or director of any SEC-registered public company. The settlements are subject to court approval.
“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.
Morvai agreed to a settlement that was approved by the court in February requiring him to pay a $60,000 penalty for falsifying the company’s books and records in connection with the bribery scheme.