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Consumer loan company pays $21.7M for FCPA violations
The Securities and Exchange Commission has announced that World Acceptance Corporation, a South Carolina-based consumer loan company, has agreed to pay $21.7 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA).
The SEC Order in the matter states the Commission found that from at least December 2010 through June 2017, World Acceptance Corporation’s former Mexican subsidiary, WAC de Mexico S.A. de C.V., paid more than $4 million in bribes to Mexican government officials and union officials to secure the ability to make loans to government employees and ensure that those loans were repaid in a timely manner. According to the order, WAC Mexico paid the bribes in a variety of ways, including by depositing money into bank accounts linked to the officials and by hiring an intermediary to distribute large bags of cash among the officials. The SEC found that the bribes were inaccurately recorded in World Acceptance Corporation’s books and records as legitimate business expenses. The order also states that World Acceptance Corporation lacked internal accounting controls sufficient to detect or prevent the payments of such bribes and that management lacked the appropriate tone at the top regarding internal audit and compliance, thereby undermining the effectiveness of those functions.
The order requires that the company cease and desist from violating the anti-bribery, books and records, and internal controls provisions of the FCPA, and pay $17.826 million in disgorgement, $1.9 million in prejudgment interest, and a $2 million penalty.