SEC drops some charges against former Magyar Telekom execs
Tuesday, March 11, 2014 at 2:08AM
Richard L. Cassin in Andras Balogh, Deutsche Telekom, Elek Straub, Hungary, Joel Schectman, MMagyar, Macedonia, Montenegro, Statute of Limitations, Tamas Morvai, Telekom Crne Gore AD, personal jurisdiction

The Wall Street Journal's Joel Schectman reported Monday that the SEC is dropping allegations that former executives of the Hungarian unit of Deutsche Telekom bribed officials in Montenegro.

Former Magyar Telekom CEO Elek Straub and two former senior executives, Andras Balogh and Tamas Morval, were accused of bribing Montenegrin officials in 2005 when Magyar gained a controlling interest in privatized Telekom Crne Gore A.D.

"The SEC is withdrawing those claims," the Wall Street Journal said, "while continuing to pursue a second set of civil allegations."

Other allegations that the executives bribed government officials in Macedonia so regulators would block competition against Magyar are still pending.

Magyar and Deutsche Telekom paid $95 million in December 2011 to settle FCPA offenses. They paid a combined $63.9 million criminal penalty to the DOJ. And Magyar paid $31.2 million in disgorgement and prejudgment interest to settle civil charges with the SEC.

The SEC sued the former executives in late 2011. All are Hungarian citizens. They lost a motion to dismiss the suit last year. They had argued the court lacked person jurisdiction over them and that the FCPA's five-year statute of limitations barred the charges.

The Wall Street Journal said Monday that the SEC, in dismissing the Montenegro allegations, is trying to simplify the case because it may be too complicated to present at trial.

"At one point the case contained 26 million documents to review, according to court filings," the WSJ said.

The three defendants are scheduled to go to trial in 2015.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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