World Acceptance Corporation Pays SEC Fine on FCPA Violation in Mexican Government Bribery
Posted on 08/06/2020
On August 6, 2020, the Securities and Exchange Commission (SEC) disclosed that World Acceptance Corporation, a South Carolina-based consumer loan company, has agreed to pay US$ 21.7 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA).
According to the press release, “The SEC’s order finds 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 US$ 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 SEC’s 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’s order finds that these bribes were inaccurately recorded in World Acceptance Corporation’s books and records as legitimate business expenses. The SEC’s order further finds 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.”
World Acceptance Corporation did not admit or deny the SEC’s findings and consented to the entry of an order requiring that the company cease and desist from violating the anti-bribery, books and records, and internal controls provisions of the FCPA, and pay US$ 17.826 million in disgorgement, US$ 1.9 million in prejudgment interest, and a US$ 2 million penalty.
Arlington, VA-based Mills Value Adviser, Inc. is one of the largest equity shareholders in World Acceptance Corporation. CAS Investment Partners, LLC is also a major equity shareholder, according to filing data.
