The Securities and Exchange Commission has issued an order imposing a $75,000 fine on the chief executive officer of a Chilean airline in connection with payments made to settle a labor dispute between a subsidiary of the airline and its employees in Argentina. This official, who at the time was CEO of the company’s passenger airline business, authorized $1.15 million in improper payments to a third-party consultant then serving as a government official with the understanding that the consultant could pass some portion of that money to union officials.

According to the SEC, the payments were made pursuant to an unsigned consulting agreement that purported to provide services that the CEO understood would not occur. He authorized subordinates to make the payments, which were improperly described in the company’s books and records and thus circumvented internal accounting controls. At the time, the company did not have a policy requiring that due diligence be performed on consultants, and neither the CEO nor the company conducted any due diligence on the consultant or any of his related entities.

The SEC states that in addition to paying the penalty the CEO has agreed to attend all anti-corruption training sessions his company requires for senior executives, including both live and online trainings to be completed on at least an annual basis. These sessions will include anticorruption laws and regulations such as the Foreign Corrupt Practices Act, anti-trust laws, the company’s code of conduct and all other applicable policies that each company employee must follow.

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