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« UK wants Big Four to compete for audit work | Main | SEC awards $150,000 to fraud-stopping whistleblower »
Thursday
Oct312013

Avon: SEC wants ‘significantly greater’ FCPA penalty

Avon Products Inc. said in an SEC filing Thursday that the Securities and Exchange Commission offered an FCPA settlement last month with monetary penalties that were ‘significantly greater’ than the $12 million the company had offered.

The DOJ may also seek higher penalties, Avon said, in which case its earnings, cash flow, and ongoing business could be ‘materially adversely impacted.’

In August, Avon said the DOJ and SEC rejected an offer to settle the ongoing FCPA investigation for $12 million.

Avon launched an internal investigation in 2008 linked to the payment of improper promotional expenses in China.

By the end of last year, Avon had reportedly spent about $300 million on its internal FCPA investigation.

The company said Thursday its accrual for an FCPA settlement is still just $12 million.

The Wall Street Journal reported in February 2012 that the DOJ had gone to a grand jury with evidence of FCPA violations against U.S. executives at Avon.

Former chief executive Andrea Jung left Avon in 2012. She joined the company in 1994 and became CEO in 1999.

Avon said in its filing Thursday that ‘Monetary penalties at the level proposed by the SEC staff are not warranted.’

The company didn't say how much the SEC is asking for to settle the case.

No public company has fought FCPA charges in court for more than two decades.

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Richard L. Cassin is the Publisher and Editor of the FCPA Blog. He can be contacted here.