b'In the administrative order, the SEC also stated that Alexion fully cooperated in the investigation, tookWACs lack of adequate internal accounting various remedial measures, and enhanced its compli- controls and a culture that undermined ance program. its internal audit and compliance functions The Matter of World Acceptancecreated the perfect environment for illicit Corporation, No. 3-19905 activity to occur.On August 6, 2020, the SEC announced that it had entered into a settlement agreement with World Acceptance Corporation (WAC), a publicly traded,to WACs headquarters in South Carolina without any South Carolina-based consumer loan company,of the underlying receipts, invoices, or other backup wherein WAC agreed to pay more than $21.5 million todocumentation. Charles E. Cain, Chief of the SEC resolve charges that it violated the FCPAs anti-bribery,Enforcement Divisions FCPA Unit, noted that WACs books and records, and internal accounting controlslack of adequate internal accounting controls and a provisions in connection with its former wholly-ownedculture that undermined its internal audit and compli-subsidiary in Mexico, WAC de Mexico, S.A. de C.V.ance functions created the perfect environment for (WAC Mexico). illicit activity to occur. Pursuant to its seven year-long According to the SEC order, between Decemberbribery scheme, WAC made approximately $18 million. 2010 and June 2017, WAC Mexico paid $4.1 million inIn the SEC order, the SEC noted WACs cooperation in bribes, both directly and through intermediaries, tothe investigation, including its facilitation of witnesses Mexican government officials and union officials totraveling from Mexico to the U.S. for interviews, and obtain and retain business related to its Prestamos Vivaits subsequent remedial measures, including several business line (Viva). As part of its overall business,personnel changes and divesting itself entirely of WAC WAC Mexico, via Viva, offered small loans to state andMexico in mid-2018. federal government employees in Mexico. BetweenThe settlement required WAC to pay $17.8million in December 2010 and June 2017, WAC Mexico entereddisgorgement, $1.9 million in prejudgment interest, into at least 30 Viva contracts with government enti- and a civil monetary penalty of $2 million. WAC was ties, which were signed by government officials, and/ also ordered to cease and desist committing any or union officials on behalf of government employees.violations of the FCPAs books and records and internal According to the SEC order, to obtain these contractsaccounting controls provisions.and to ensure that they were paid in a timely manner, WAC Mexico paid monetary bribes to Mexican govern-ment officials in a variety of forms, including direct bankUnited States v. Herbalife Nutrition Ltd.,deposits and large bags of cash distributed to officialsNo. 20-CR-00443 (S.D.N.Y.)via a third-party intermediary hired by WAC Mexico. WAC Mexico also hired other third-party intermediariesOn August 28, 2020, Herbalife Nutrition Ltd. to oversee and coordinate the ongoing bribe payments.(Herbalife), a publicly traded global nutrition company, The SEC order noted that the bribes were known inter- resolved FCPA charges with both the DOJ and SEC.nally as gloves, royalty payments, scholarships,Herbalife was accused of falsifying its books and and support.records between 2007 and 2016 to conceal corrupt In addition to, and in further support of, the paymentand other improper payments to Chinese officials and of bribes to government officials, WAC Mexico alsostate-owned entities made by its China subsidiaries inaccurately recorded the payments as commis- (Herbalife China). In exchange for their bribes, which sion expenses in WACs public books and records.amounted to over $25 million in ten years, Herbalife According to the SEC order, WAC was able to conductadmitted that the Chinese officials helped Herbalife and hide its bribery scheme for nearly a decadeChina to: i) obtain licenses to sell its product in China;because it lacked internal accounting controls sufficientii) influence Chinese officials during investigations by to find or prevent the bribe payments. For example,Chinese authorities into its operations; and iii) remove the order explained that WAC Mexico used manualnegative reports about Herbalife China from govern-checks as forms of payment, which allowed for WACment controlled media. Herbalife China admitted to Mexicos managers to pre-sign blank checks withoutfalsely recording the bribes as travel and entertain-any oversight or limitations. In addition, WAC Mexicoment expenses. Because Herbalife Chinas books manually created a spreadsheet each month thatwere consolidated into Herbalifes financial statements, listed the checks paid that month, which it then sentthese falsehoods made Herbalifes books inaccurate.17'