Record-breaking whistleblower award linked to Ericsson bribery case 

In a recent report, it was revealed that the record-breaking whistleblower award of $279 million issued by the Securities and Exchange Commission (SEC) was related to a bribery case against Swedish telecommunications company Ericsson. 

The award from the SEC’s cash-for-tips program was related to the $1.1 billion settlement the company reached with U.S. authorities in 2019. Ericsson allegedly conspired to make illegal payments to win business in five countries, including China. 

The whistleblower provided crucial information to SEC 

The reporting person, whose identity remains anonymous due to whistleblower protection rules, provided information to the SEC that was crucial in the investigation. Under SEC rules, whistleblowers can receive an award of between 10% and 30% of the fines collected in SEC civil-enforcement actions and related actions from other enforcement agencies resulting from a tip. This is assuming the SEC collects more than $1 million. 

The Ericsson case is one of the largest-ever FCPA (Foreign Corrupt Practices Act) cases, which prohibits the use of bribes to foreign officials to win or keep business. The company’s wrongdoing occurred in Djibouti, China, Vietnam, Kuwait, and Indonesia from 2000 to 2016. 

Details of Ericsson’s bribery case 

In 2019, Ericsson agreed to pay more than $1 billion to resolve probes into corruption, including the bribing of government officials. The deferred prosecution agreement included a $520 million criminal penalty and specified that $540 million of illicit profits were to be surrendered. It also required Ericsson to retain a compliance monitor for three years and to cooperate in related probes. 

However, a series of alleged missteps since 2019 led Ericsson in March 2023 to agree to plead guilty and pay an additional fine of about $207 million. In the decision to tear up the previous settlement and seek new penalties, prosecutors highlighted how failure by Ericsson’s outside lawyers contributed to their decision.  

Record-breaking whistleblower award 

The $279 million whistleblower award topped the previous record, a $114 million whistleblower award the SEC issued to an individual in October 2020. 

Two other individuals also applied to receive a whistleblower award from the SEC, but their claims were denied. In a publicly available but highly redacted version of the SEC order, the commission said the claimants’ information didn’t help the agency’s enforcement action. 

Ericsson declined to comment on the matter, as well as both the SEC and the U.S. Attorney’s Office for the Southern District of New York, which brought the charges against Ericsson. 

The importance of whistleblowers in exposing corporate wrongdoing 

The Ericsson case highlights the importance of whistleblowers in exposing corporate wrongdoing. It also serves as a warning to companies that engage in corrupt practices that they will face severe consequences for their actions. Furthermore, the SEC’s cash-for-tips program certainly provides a powerful incentive for individuals to come forward with information that can lead to successful enforcement actions.  

You can read more about incentives systems for internal reporting in our guest post “Should you reward a whistleblower?”.  

Are you interested in Whistlelink? Visit our Product page to learn how Whistlelink can help you get compliant.  
Would you like to discuss a solution for your organisation? Please book a free demo of our system!