Thursday, 29 July 2010

GE reaches settlement with SEC over Iraqi Oil for Food Programme

GE has reached a settlement with the US Securities and Exchange Commission (SEC) regarding its involvement in Oil for Food Programme. SEC had found that two of GE’s subsidiaries, along with other subsidiaries of public companies acquired by GE, made illegal cash payments, and in-kind payments of computer equipment, medical supplies, and services to the Iraqi Health Ministry and the Iraqi Oil Ministry in order to obtain valuable contracts under the UN Oil for Food Programme.

SEC has said that GE’s conduct violated provisions of the Securities Exchange Act of 1934 that relates to keeping and maintaining accurate books and records and implementing sufficient controls to prevent inaccurate recording of transactions. Based on SEC's findings, GE has agreed to pay a $1 million penalty and to disgorge around $22.5 million in profits these subsidiaries are estimated to have earned.

GE has stated that it is “committed to the highest standards of conduct in all transactions”, and that the business dealings in connection to the Oil for Food Programme did not meet their usual “standards”. GE co-operated fully with the SEC investigation, and has received confirmation that the US Department of Justice will not take any further action in relation to these matters.

For more news and expert analysis about Iraq, please see Iraq Focus.

© 2010 Menas Associates

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