B Communications Ltd. and its controlling shareholder, Internet Gold-Golden Lines Ltd. (Internet Gold), have reported in Form 20-F filings that the SEC has begun an investigation into possible violations of the Foreign Corrupt Practices Act by Internet Gold and/or Bezeq Israel Telecommunications Corporation Ltd. (Bezeq), a major Israeli telecommunications provider in which B Communications holds a controlling stake. Both Internet Gold and B Communications also reported that their audit committees have engaged outside US counsel to conduct an assessment of the companies’ internal controls to determine whether there have been violations of the FCPA or other laws in connection with the preparation of the companies’ financial statements.
The filings state that the SEC’s interest stems from a criminal investigation in Israel into money laundering, corporate fraud, breach of trust, bribery, and securities violations by persons associated with Bezeq and related entities. The investigation has thus far resulted in the arrest and indictment of several former Bezeq executives and, in February 2019, a recommendation by Israel’s attorney general that Israel’s Prime Minister be indicted, subject to a hearing, in connection with alleged bribery.