Embraer-Empresa Brasileira de Aeronautica Inks Settlement Deals in U.S. and Brazil

Embraer-Empresa Brasileira de Aeronautica (ERJ) is firmer after the company said in a Securities and Exchange Commission (SEC) filing it has finalized definitive agreements with the SEC and Department of Justice (DOJ) to settle criminal and civil violations of the U.S. Foreign Corrupt Practices Act (FCPA). The company also said it finalized a term of undertaking with the Brazilian Federal Public Prosecutor’s Office and the Brazilian Securities and Exchange Commission (CVM) to resolve allegations of violations of certain Brazilian laws.

In the U.S., it agreed to pay US$98.2 million to the SEC (of which up to US$20.0 million may be deducted if such amount is actually paid to the MPF and the CVM under the TCAC), as disgorgement of profits, and US$107.3 million to the DOJ, as penalty for one count of conspiracy to violate the anti-bribery and books and records provisions of the FCPA and one count of violating the internal controls provisions of the FCPA.

Also, among other things, the DOJ agreed to defer prosecution for three years for the acts acknowledged by us in a deferred prosecution agreement (DPA), after which period the charges will be dismissed if the company does not violate the terms of the DPA.

Under the TCAC, it will payR$ 64 million, of which R$58 million is to a Brazilian federal fund (Fundo de Defesa dos Direitos Difusos), as disgorgement of illegal profits, and R$6 million to the CVM, as damages and penalty. The amounts payable under the TCAC is to be deducted from the amount payable under the final agreements. It will also, among other things, cooperate with the MPF and the CVM in lawsuits and administrative proceedings against individuals arising out of the acts acknowledged in the TCAC.

By Prospect Staff Writer