SEC Charges Consumer Loan Company With FCPA Violations

The Securities and Exchange Commission today announced that World Acceptance Corporation, a South Carolina-based consumer loan company, has agreed to pay $21.7 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA). 

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 $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.

“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,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit.

Without admitting or denying the SEC’s findings, World Acceptance Corporation 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 $17.826 million in disgorgement, $1.9 million in prejudgment interest, and a $2 million penalty.

The SEC’s investigation was conducted by Jennifer T. Calabrese of the FCPA Unit and supervised by Ansu N. Banerjee.  The SEC appreciates the assistance of the U.S. Department of Justice Criminal Division’s Fraud Section, the U.S. Attorney’s Office for the Southern District of New York, and the Federal Bureau of Investigation.