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SEC accuses Deutsche Telekom of violating corrupt practices act

The U.S. Securities and Exchange Commission accused Deutsche Telekom AG and a unit of violating the Foreign Corrupt Practices Act.

The SEC sued the company and its Magyar Telekom unit in federal court in New York Thursday. The court filing doesn’t indicate whether a settlement has been reached. John Nester, an SEC spokesman, declined to comment beyond the filing. Elpida Trizi, a Deutsche Telekom spokeswoman, declined to immediately comment on the lawsuit.

In a separate lawsuit Thursday, the agency accused three former Magyar Telekom officials of violating the FCPA. The defendants are former Chief Executive Officer Elek Straub, former Director of Central Strategic Organization Andras Balogh and former Director of Business Development and Acquisitions in the Central Strategic Organization Tamas Morvai.

All three are Hungarian citizens believed to be residing in that country, according to the complaint.

The three former executives at Magyar Telekom in 2005 and 2006 executed a plan to bribe government officials in Macedonia to delay or prevent a new competitor from operating in that country and to obtain regulatory benefits, according to the complaint. Magyar Telekom paid $4.88 million euros ($6.3 million) during that period to an intermediary under the guise of consulting and marketing contracts, according to the complaint.

“The former executives also offered or promised Macedonian political party officials a valuable business opportunity in return for the party’s support of Magyar Telekom’s desired benefits,” the SEC wrote.

AT&T Inc. ended its $39 billion bid to acquire Deutsche Telekom’s T-Mobile USA on Dec. 19.

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