© Reuters. Ericsson Wins Justice Department Settlement, Citi Sees It as a Positive
By Senad Karaahmetovic
Ericsson (BS:) (NASDAQ:) shares are trading nearly 4% higher in pre-open trading after the company confirmed it has reached a settlement with the US Department of Justice (DoJ) for non-criminal breaches of the 2019 Deferred Prosecution Agreement (DPA).
The Swedish telecommunications giant will plead guilty and pay a criminal penalty of more than $206 million, ending the DPA. Ericsson used outside consultants to bribe foreign government officials.
“Taking this step today means that the issue of violations is resolved. This allows us to focus on executing our strategy while driving continuous culture change across the company with integrity at the core of everything we do,” said Börje Ekholm, CEO of Ericsson.
Ericsson is still under investigation by the Justice Department and the US Securities and Exchange Commission (SEC) for its dealings in Iraq.
Citi analysts were positive about the deal.
“It is good that the DPA has come to an end, but in our view the Iraq investigation remains an obstacle to action. Our rating is Neutral as the cheap valuation is offset by the possibility of additional sanctions related to its conduct in Iraq and the weakness of the margin,” the analysts wrote.
