September 14, 2017

Brazilian petrochemical company Braskem SA signed a proposed settlement agreeing to pay U.S. investors $10 million for concealing its role in the corruption scandal centered around the state-owned oil company.

The company, co-owned by state-owned oil firm Petroleo Brasileiro, known as Petrobras, and construction firm Odebrecht SA, pleaded guilty in the U.S. in December 2016 to violating the Foreign Corrupt Practices Act, which bars the use of bribes to foreign officials to get or keep business, as part of a global settlement struck with Brazil and Switzerland. It agreed to pay $957 million in fines and damages at the time as part of a broader settlement made alongside Odebrecht relating to Operation Car Wash, the massive corruption investigation that continues to rock Brazil.

Investors in the U.S. had sued Braskem in 2015, alleging that the company had misled investors into believing its operations were legitimate. The proposed settlement, under which investors who bought American depository receipts from 2010 to 2015 would receive a share of the $10 million, is subject to a number of conditions, including court approval, Braskem noted in a statement.

Plaintiffs attorney Steven J. Toll, who co-chairs the Securities Fraud and Investor Protection practice at the firm Cohen Milstein Sellers & Toll PLLC and was lead counsel for the class action, said in a statement that the settlement not only brings financial relief to their clients, but “it is a victory for all who have been hurt” by Braskem, Petrobras and the other participants in Brazil’s corruption scandal.

The full article can be viewed here.