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2014 Press Releases

U.S. Embassy Statement Regarding Telekom Case

March 19, 2014

The case entitled “U.S. Securities and Exchange Commission v. Straub” (11-CV-9645) was a civil case brought by the U.S. Securities and Exchange Commission (SEC) against Elek Straub, Andras Balogh, and Tamas Morvai of Magyar Telecom.  In part, the case alleged that Straub, Balogh, and Morvai authorized Magyar Telekom to make 7.35 million euros in corrupt payments to government officials in Montenegro in order to facilitate Magyar Telekom’s acquisition of the state-owned telecommunications company Telekom Crne Gore A.D.

Because Magyar Telekom had shares listed on the U.S. stock market, the U.S. had jurisdiction over Magyar Telekom executives for violating the Foreign Corrupt Practices Act of 1977.  Thus, these individuals could be charged by the SEC.  The SEC does not have, and never had, jurisdiction over the actions of the Montenegrins involved in this case. 

In January 2014, Assistant Chief Litigation Counsel Robert I. Dodge notified defense council that the SEC would not pursue its factual allegations regarding corruption in Montenegro, stating that in order to streamline the factual allegations, it would base its claims for relief entirely upon its allegations relating to Macedonia.  However, the SEC found evidence of bribery in Montenegro.

The Government of Montenegro agreed to open an investigation into these allegations in January 2012.  Since that time, the U.S. Embassy has supported the investigation by assisting the government to obtain documents related to the case. 

The United States Embassy calls upon the Government of Montenegro to carry out a thorough investigation and to bring all guilty parties to justice.