Petrochemical firm Braskem SA reached a $10 million deal in New York federal court Thursday with investors who accused the company of hiding its role in bribery tied to dealings with Brazilian oil giant Petrobras, a role that sent shares tumbling when the scandal was revealed.
Braskem, the largest petrochemical company in Latin America, copped to violations of the Foreign Corrupt Practices Act and paid $957 million in fines last year, but had argued in court that its statements to U.S. investors didn't amount to fraud.
The company agreed to pay the investors $10 million in cash to drop their claims, covering between 28 to 47 percent of what the investors' attorneys saw as their best-case scenario recovery from the litigation, according to a statement from lead counsel Cohen Milstein Sellers & Toll PLLC on Thursday.
"Braskem investors were sadly the victims of a shadowy bribery scheme and a scandal that has engulfed Brazil and reverberated worldwide," lead counsel Steven J. Toll said in the statement. "This settlement not only brings financial relief to our clients, but is a victory for all who have been hurt by Braskem, Petrobras and the other participants in an unprecedented system of political and corporate corruption."
The case is In re Braskem Securities Litigation, case number 1:15-cv-05132, in U.S. District Court for the Southern District of New York.
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