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Tuesday, May 21, 2024 | Back issues
Courthouse News Service Courthouse News Service

Airline Executive Settles SEC Corruption Charge

WASHINGTON (CN) - The head of South American-based LAN Airlines settled charges about money that changed hands amid the airline's union headache in Argentina.

The Securities and Exchange Commission said it initiated an action against Ignacio Cueto Plaza while investigating $1.15 million that the airline wired to the Virginia-based brokerage account of a company with which Cueto "authorized a sham consulting agreement."

"The unsigned agreement falsely stated that the consultant would undertake a study of existing air routes in Argentina," the SEC said in a statement. "Cueto knew no such study would be performed and the consultant instead agreed to help settle the labor dispute, and Cueto also understood it was possible that the consultant would pass a portion of the payments along to union officials in Argentina. Cueto approved the payments to get the unions to abandon their threats to enforce the single-function rule and to get them to accept a wage increase lower than the amount asked for in negotiations."

Now CEO, Cueto was serving as president and chief operating officer of the airline at the time.

Cueto settled the case Thursday without admitting to the SEC's order finding that he violated internal-accounting controls and false-records provisions of the Foreign Corrupt Practices Act (FCPA).

The settlement requires Cueto to pay a $75,000 penalty, plus attend anti-corruption training.

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