ABB Ltd (ADR) under investor investigation over possible Foreign Bribery

Oct. 18, 2010 - PRLog -- After ABB Ltd agreed settle allegations over violations of the U.S. Foreign Corrupt Practices Act for alleged bribery and kickbacks in Mexico and Iraq an investigation on behalf of current long term investors in ABB Ltd (ADR)  was  announced.

If you are a current long term investor in ABB Ltd (ADR) , and/or have any information relating the investigation, you have certain options and you should contact the Shareholders Foundation, Inc by email mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

The investigation by a law firm on behalf of current long term investors in ABB Ltd (ADR)  concerns whether certain officer and directors of ABB Ltd breached their fiduciary duty owed to ABB Ltd (ADR) investors and can be held liable for the $58million ABB Inc recently agreed to pay to resolve allegations of violations of the U.S. Foreign Corrupt Practices Act for alleged bribery in Mexico and Iraq.

The U.S. Justice Department recently announced that ABB Ltd. agreed to pay more than $58million in criminal and civil penalties, disgorgement and interest to resolved charges related to violations of the U.S. Foreign Corrupt Practices Act (“FCPA”).  According to the Justice Department “the Foreign Corrupt Practices Act was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay…to a foreign official to influence the foreign official in his or her official capacity … to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.”
The SEC alleged that ABB made more than $2.7 million in bribes and kickbacks to obtain contracts that generated more than $100 million in revenues. The payments allegedly were made to "government officials in Mexico to obtain business with government owned power companies," and to the "former regime in Iraq to obtain contracts under the United Nations Oil for Food Program." ABB has reached a settlement with the U.S. Department of Justice in which ABB has agreed to pay $19 million in criminal penalties and in the related matter a settlement with the U.S. Securities and Exchange Commission (“SEC”) in which it agreed to pay more than $39 million in disgorgement, pre-judgment interest and civil penalties. According to the Justice Department, ABB Ltd's U.S. subsidiary, ABB Inc., pleaded guilty at the plea hearing before U.S. District Court in the Southern District of Texas to a criminal information charging it with one count of violating the anti-bribery provisions of the FCPA and one count of conspiracy to violating these provisions of the FCPA. As part of ABB Inc.'s plea, so the Justice Department, ABB admitted that one of its business units based in Sugar Land, Texas, ABB Network Management (“ABB MN”), paid bribes from 1997 to 2004 that totaled approximately $1.9 million to officials at ‘Comision Federal de Electridad’ (“CFE”), a Mexican state-owned utility company. ABB Inc. admitted also, so the Justice Department, that the bribe payments were made through various intermediaries, including a Mexican company that served as ABB NM's sales representative in Mexico on its contracts with CFE. Fernando Maya Basurto, who pleaded guilty on Nov. 16, 2009, to a one-count criminal information charging him for his role in the conspiracy, was a principal of the Mexican company. In his plea, Basurto admitted that while he acted as a sales representative for ABB NM, he conspired with others to make corrupt payments to CFE officials, helped launder the bribe monies, and engaged in a cover up to obstruct the investigations of the Department of Justice and the SEC.
ABB Ltd (ADR) 12 month total revenue went from $23.281billion in 2006 to $31.795billion in 2009. Its Net Income went from $1.39billion in 2006 to $2.9billion in 2009.
Shares of ABB Ltd (ADR)  started 2006 at roughly $11 and inclined until the end of 06 to almost $18 per share. During 2007 ABB Ltd (ADR) shares gained value to over $30 in November 2007. Before losing significantly value in 2008 ABB shares reached over $32 per share in mid 08, but fell under $10 in Fall 2008. Since then ABB shares were able to regain value to recently over $22 per share.

Those who are current long term investors in ABB Ltd (ADR) (Public, NYSE-ABB), and/or have any information relating the investigation, have certain options and should contact the Shareholders Foundation, Inc by email mail@shareholdersfoundation.com or call +1(858) 779 – 1554.

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The Shareholders Foundation, Inc. is an investor advocacy group. We do research related to shareholder issues and inform investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. At Shareholders Foundation, Inc. we are in contact with a large number of shareholders. We believe that together we can combine the interests of many investors, and use the size of our interest as leverage against the giant corporations. We offer help, support, and assistance for every shareholder. We help investors find answers to their questions and equitable solutions to their problems. The Shareholders Foundation, Inc. is not a law firm. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.