The SEC announced the first FCPA enforcement action in 2022. South Korean telecommunications company, KT Corporation, agreed to pay $6.3 million to settle FCPA violations. As part of the settlement, KT Corp. agreed to pay $3.5 million in civil penalties and $2.8 million in disgorgement. KT Corp. is South Korea’s largest telecommunications company. KT Corp. violated the FCPA’s books, records, and internal accounting control provisions stemming from its South Korea and Vietnam activities. As explained in the SEC’s Order, KT lacked sufficient internal accounting controls over its expenses, including executive bonuses and purchases of gift cards, which resulted in KT Corp. managers and executives generating slush funds for illegal purposes. Additionally, KT Corp. failed to adopt anti-corruption policies and procedures concerning donations, employment candidates, vendors, subcontractors, or third-party agents. As a result, KT Corp. employees could provide improper benefits to government officials and potential government customers.
In this episode, Michael Volkov reviews the KT Corp. settlement.