Episode 226 — A Deep Dive into KT Corp’s SEC Settlement for FCPA Violations
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 and records and internal accounting controls provisions stemming from its activities in South Korea and Vietnam. 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 with respect to donations, employment candidates, vendors, subcontractors or third-party agents. As a result, KT Corp. employees were able to provide improper benefits to government officials and potential government customers.
In this Episode, Michael Volkov reviews the KT Corp. settlement.