In September 2009, AGCO Corp. (a Georgia based agriculture company) agreed to pay $1.6 million to resolve a DOJ enforcement action involving the U.N. Oil for Food Program. See here. The enforcement action involved a criminal information filed against AGCO’s wholly-owned U.K. subsidiary, AGCO Ltd., that was resolved via a deferred prosecution between the DOJ and AGCO – see here. In addition to the DOJ enforcement action, AGCO settled a related SEC enforcement action by agreeing to pay a $2.4 million civil penalty and approximately $16 million in disgorgement and prejudgment interest – see here. As detailed in this prior post, the SEC complaint contained specific details of AGCO’s internal control failures.
Pursuant to the three year DOJ DPA, AGCO agreed to a host of “compliance undertakings” and its failure to adopt and implement the compliance undertakings – as well as other requirements of the DPA – could result in AGCO being in breach of the DPA and subject to prosecution.
Pure compliance it is not.
Against this backdrop, it was noteworthy to see that AGCO recently won Corporate Secretary’s award for the “best overall governance, compliance and ethics program (small to mid-cap). See here. According to the submission guidelines, the award related to “work carried out in the period July 1, 2010 to June 30, 2011.” The submission guidelines further stated as follows. “This award will look at coordination of governance, compliance, ethics and risk management processes across the entire corporation (including all subsidiaries).The judges will consider the level of understanding and integration of good governance principles across all disciplines and a truly non-silo approach to achieving an ethical governance environment.”
In this company press release (a release that does not mention the prior FCPA enforcement action or that AGCO is under a DPA) AGCO said that Corporate Secretary “recognized the company’s industry-leading global anti-corruption program.” AGCO Chairman, President and CEO Martin Richenhagen stated as follows: “We are proud that AGCO’s leadership in the areas of governance, compliance and ethics is recognized and honored. We have enhanced our compliance program by increasing our employees’ level of understanding and integrating good governance principles throughout the company.”
Shook Hardy & Bacon, the law firm that represented AGCO in the FCPA enforcement action, also issued a press release – see here.