The U.S. Securities and Exchange Commission (SEC) and IBM settled alleged violations of the Securities Exchange Act of 1934, resulting from presumed illicit payments to Argentine officials by IBM subsidiary IBM-Argentina, S.A. in 1994 and 1995. The SEC found that IBM violated Section 13(b)(2)(A) of the Exchange Act in connection with a $250 million contract to integrate and modernize the computer system of a commercial bank owned by the Argentine government. According to the SEC, certain former senior management of IBM-Argentina, S.A. caused IBM-Argentina to enter into a subcontract with Capacitacion Y Computacion Rural, S.A. (CCR), and money paid to CCR by IBM-Argentina in connection with the subcontract was apparently subsequently paid by CCR to certain bank officials. Specifically, during 1994 and 1995, IBM-Argentina paid CCR approximately $22 million under the subcontract, of which at least $4.5 million was transferred to several bank directors by CCR. IBM-Argentina’s former senior management hid the details of the subcontract, providing IBM-Argentina’s procurement department with fabricated documentation which was incorporated into IBM’s 1994 From 10-K. Without admitting or denying the SEC’s allegations, IBM agreed to pay a $300,000 penalty.