Embraer S.A. (ERJ) Accused of Hiding Bribery Scheme From Investors
According to the complaint, Embraer S.A. (ERJ) submitted several filings with the U.S. Securities and Exchange Commission (“SEC”) certifying that the financial information was accurate and disclosed any material changes to the company’s internal control over financial reporting. However, Embraer officials failed to disclose that the company had paid bribes to officials in the Dominican Republic to secure contracts for the sale of aircraft while Embraer’s President and Chief Executive Officer was aware of the bribery scheme. On September 23, 2014, The Wall Street Journal reported that Brazilian authorities filed bribery charges against eight Embraer employees, claiming that they had bribed officials in the Dominican Republic to secure a $92 million contract. On July 29, 2016, Embraer revealed that it was recognizing a $200 million loss contingency in the quarter ended June 30, 2016, reflecting the likely outcome of investigations by the U.S. Department of Justice and the SEC. The stock continues to trade below its class period high.
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