FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo
The U.S. Securities and Exchange Commission announced Thursday that it had fined World Acceptance Corp , a consumer loan company, US$21.7 million for paying bribes in Mexico.
WASHINGTON: The U.S. Securities and Exchange Commission announced Thursday that it had fined World Acceptance Corp , a consumer loan company, US$21.7 million for paying bribes in Mexico.
The SEC said in a statement that the company’s Mexican subsidiary paid over US$4 million in bribes to Mexican government and union officials in exchange for business lending to government employees.
The South Carolina-based company agreed to the penalty without admitting or denying guilt. The company agreed to overhaul its internal operations, as well as pay US$17.8 million in disgorgement, nearly US$2 million in interest, and a US$2 million penalty.
“This long-running bribe scheme did not happen in a vacuum. Through a lack of adequate internal accounting controls and a culture that undermined its internal audit and compliance functions, World Acceptance Corporation created the perfect environment for illicit activity to occur for nearly a decade,” Charles Cain, a senior SEC enforcement official, said in a statement.
The SEC said that the company’s Mexican subsidiary would deposit money into bank accounts linked to the officials or distribute bags of cash. The expenses were then recorded as legitimate business expenses.
The SEC charged that the company’s internal controls were insufficient to detect the activity, and management “lacked the appropriate tone” on compliance.
A defense attorney for the company did not immediately respond to a request for comment.
(Reporting by Pete Schroeder; editing by Jonathan Oatis)