Ex-Magyar Telekom Execs Agree to SEC Penalties in Bribery Case

Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...

By Andrew Ramonas

Two former executives at Deutsche Telekom AG subsidiary Magyar Telekom Plc. in Hungary have reached deals to resolve foreign bribery charges.

Elek Straub, a former chief executive of the Budapest-based telecommunications giant, agreed to pay $250,000 to settle Securities and Exchange Commission claims he violated the Foreign Corrupt Practices Act, according to an April 24 filing in the U.S. District Court for the Southern District of New York ( SEC v. Straub , S.D.N.Y., No. 11-CV-9645, 4/24/17 ). Andras Balogh, a former Magyar Telekom chief strategy officer, accepted a $150,000 penalty, another court document shows ( SEC v. Straub , S.D.N.Y., No. 1:11-cv-09645, 4/24/17 ). They both agreed to five-year bans on serving as an officer or director of a public company.

Enforcement of the foreign bribery statute will remain a priority under SEC chairman nominee Jay Clayton, outgoing SEC FCPA unit chief Kara Brockmeyer said last month. Clayton’s nomination is pending in the Senate.

Straub, Balogh and the two companies were charged in 2011 in connection with schemes that allegedly funneled millions of dollars to Macedonian and Montenegrin officials to get telecommunications business for Magyar Telekom and fight off competitors. Deutsche Telekom and Magyar Telekom agreed at the time to pay $95 million to resolve related SEC and Justice Department allegations.

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

Lawyers for Straub and Balogh weren’t immediately available to comment.

Their settlements still need a judge’s approval.

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bna.com

To contact the editor responsible for this story: Phyllis Diamond at pdiamond@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Securities & Capital Markets on Bloomberg Law