IBM’s two-year-old settlement of accusations of bribery in China and Korea won federal court approval even as the company faces new scrutiny for possible payoffs in other countries.

U.S. District Judge Richard Leon in Washington yesterday signed off on the $10 million agreement between IBM (NYSE: IBM) and the U.S. Securities and Exchange Commission initially submitted in March 2011. Leon refused to approve the deal until the company agreed to file reports to him and the regulator on its possible wrongdoing.

During a 10-minute hearing, Leon said he’s satisfied IBM “has learned its lesson and is moving in the right direction to ensure this never happens again.” If there’s another violation over the next two years, “it won’t be a happy day,” he told company officials in attendance.

The approval comes almost three months after IBM disclosed that the Justice Department is investigating whether it violated the Foreign Corrupt Practices Act in connection with contracts in Poland, Argentina, Bangladesh and Ukraine. IBM said in an SEC filing it was notified of the probes by the department in April and asked to provide information on its global anti-corruption compliance program. IBM said it was cooperating.

Of at least 34 foreign bribery settlements the SEC reached with companies since 2010, only two others failed to win judicial sign-off in less than three months.

Robert Weber, IBM’s general counsel, who attended the hearing, declined to comment afterward. None of the parties or Leon mentioned the Justice Department probe.

Final Judgment

In the final judgment Leon signed yesterday, IBM agreed to make annual reports to the judge and the SEC describing its efforts to comply with the FCPA. The company also agreed to immediately report to the SEC and the court “upon learning that it is reasonably likely” IBM violated the FCPA in connection with improper payments to foreign officials or any fraudulent books and records.

IBM opposed a requirement that’s now part of the judgment requiring it to report to the court and the SEC within 60 days of learning that it is the subject of any probe or enforcement proceeding by a federal agency or party to an administrative proceeding or civil litigation. The reporting requirements will remain in effect for two years.

Leon said the reports can be filed under seal, according to the judgment.

‘Extensive Discussions’

“In this matter, after extensive discussions with the SEC, IBM and the SEC agreed on a settlement in the matters before this court, and we are pleased the settlement has now been approved,” according to a statement handed out after the hearing by Whitney Forster, a spokeswoman for the Armonk, New York-based company.

The SEC case involved allegations that IBM bribed Chinese and South Korean officials to win at least $54 million in government contracts. The alleged payments at issue in the IBM case occurred from 1998 through 2009 and were made by employees at three subsidiaries of IBM, as well as LG IBM PC Co., a joint venture with LG Electronics Inc., according to the SEC’s complaint.

The company, without admitting or denying wrongdoing, agreed to the $10 million in disgorgement and penalties to settle alleged violations of the books-and-records and internal- control provisions of the FCPA.

Leon, who had the case under review for 28 months, said in earlier hearings that he wouldn’t accept the agreement without continuing disclosure on a broader range of possible wrongdoing than the company was willing to turn over.

‘Rubberstamp’ Settlement

At a hearing in December, Leon said he wouldn’t “rubberstamp” the settlement or “roll over like the SEC has” regarding IBM’s objections that the reporting demands were too burdensome. He also said IBM had a history of books and records violations.

In 2000, IBM settled with the SEC over alleged bribes in Argentina — one of the countries involved in the current probe. An IBM subsidiary in the country was accused of making payments through a subcontractor in 1994 and 1995 to win a $250 million contract.

Without admitting or denying the allegations, IBM paid $300,000 to settle the matter.

The case is SEC v. International Business Machines Corp., 11-cv-00563, U.S. District Court, District of Columbia (Washington).

[IBM employs some 10,000 people across North Carolina.]

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