In recent years – and notwithstanding encouraging windows of progress – economic difficulties, political shifts, and the pandemic’s lingering effects have undercut anti-corruption efforts in Latin America. The fourth annual Capacity to Combat Corruption Index (“CCC Index”), published in June 2022, reflects these recent challenges. Most countries in Latin America experienced declines in their assessed anti-corruption capabilities, with only a few demonstrating stability or improvement.
Stericycle (an Illinois based medical waste disposal company) has been under FCPA scrutiny since mid-2017 (See here).
As highlighted here, approximately two months ago the company disclosed that it had “reached agreements in principle with the DOJ and SEC.” Specifically, Stericycle disclosed:
The DOJ enforcement action involved this criminal information charging Stericycle with two counts of conspiracy to violate (1) the FCPA’s anti-bribery provisions, and (2) the FCPA’s books and records provision. The criminal charges were resolved via this deferred prosecution agreement pursuant to which Stericycle agreed to pay a net $35 million criminal penalty.
The SEC enforcement action involved this administrative order finding that Stericycle violated the FCPA’s anti-bribery, books and records, and internal controls provisions pursuant to which the company agreed to pay a net approximate $24 million in disgorgement and prejudgment interest.
Last week the DOJ announced that Vitol Inc., the U.S. affiliate of the Vitol group of companies, which together form one of the largest energy trading companies in the world, agreed to resolve a net $90 million FCPA enforcement action for conduct in Brazil, Ecuador and Mexico.
As noted in the DOJ release (and as will be explored in a future post) “Vitol has also agreed to disgorge more than $12.7 million to the Commodity Futures Trading Commission (CFTC) in a related matter and to pay the CFTC a penalty of $16 million related to trading activity not covered” by the DOJ enforcement action.
Under the heading “The Brazil Bribery Scheme” this criminal information alleges:
As highlighted in this prior post, in June 2017 World Acceptance Corporation (a South Carolina based consumer finance company) disclosed that it was “conducting an internal investigation of its operations in Mexico, focusing on the legality under the U.S. Foreign Corrupt Practices Act and certain local laws of certain payments related to loans, the maintenance of the Company’s books and records associated with such payments, and the treatment of compensation matters for certain employees.”
As highlighted in this prior post, in May 2020 the company disclosed that “discussions with the SEC have progressed to a point that the Company can now reasonably estimate a probable loss and has recorded an aggregate accrual of $21.7 million with respect to the SEC matters.”
Yesterday, the SEC announced that World Acceptance Corp. agreed to resolve a $21.7 million FCPA enforcement action based on the actions of a former wholly-owned Mexican subsidiary it sold in July 2018.
As highlighted in this prior post, in late 2011 Walmart disclosed that it began “an internal investigation into whether certain matters, including permitting, licensing and inspections, were in compliance” with the FCPA.
So began arguably one of the most high-profile instances of corporate scrutiny in Foreign Corrupt Practices Act. history. The scrutiny FINALLY came to an end yesterday as the DOJ and SEC announced (here and here) a coordinated $282 million enforcement action. As highlighted in this prior post, Walmart disclosed this likely settlement amount in November 2017, yet it still took approximately 1.5 additional years to formally resolve the matter.
This post summarizes the DOJ and SEC’s enforcement action concerning alleged improper conduct in the following countries: Mexico, Brazil, India and China. Future posts will explore numerous other issues relevant to the enforcement action.