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The Securities and Exchange Commission announced Feb. 24 that a U.S. company has agreed to pay more than $16 million to settle charges that it violated the Foreign Corrupt Practices Act when its subsidiaries paid bribes to land sales in Kenya and Angola. A press release notes that this penalty reflects the company’s self-reporting of the violations, prompt remedial acts and significant cooperation with the SEC’s investigation, steps that apparently also led the Department of Justice to recently close a related criminal investigation without pursuing charges.
Under the SEC settlement, the company must pay $14.1 million in disgorgement (the profits earned from the business obtained through the bribes at issue) and $2.1 million in pre-judgment interest. It will also have to report its FCPA remediation efforts to the SEC for three years.
The SEC charged the company with failing to prevent or detect more than $3.2 million in bribes during a four-year period due to inadequate FCPA compliance controls at its subsidiaries in sub-Saharan Africa. These bribes were generally paid in cash to employees of private companies or government-owned entities as well as other local authorities such as police or city council officials. The improper payments were falsely recorded as legitimate business expenses in the books and records of the subsidiaries, which were consolidated into the company’s books and records.