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Richard L. Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Harry Cassin Managing Editor


Elizabeth K. Spahn Editor Emeritus

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

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Monday
Mar262018

Canadian gold miner resolves FCPA charges

Kinross Gold Corporation settled FCPA charges brought by the Securities and Exchange Commission Monday for "repeated failure" to put in place anti-corruption compliance programs and adequate accounting controls at two African subsidiaries.

Kinross paid a civil penalty of $950,000 for violating the FCPA's books and records and internal accounting controls provisions. 

The SEC settled the case with an internal administrative order (pdf) and didn't go to court.

Kinross didn't admit or deny the SEC's findings.

The Toronto-based company said it received a declination from the DOJ.

In an SEC filing Monday, Kinross said:

On November 7, 2017, the U.S. Department of Justice (DOJ) also notified Kinross that it closed its investigation, declining to pursue further the matter against the Company and noting the Company’s full cooperation during the inquiry.

The SEC said Kinross acquired two African mining companies in 2010 from Red Back Mining, a Vancouver-based gold miner for $7.1 billion.

One of the companies operated in Mauritania and the other in Ghana.

The subsidiaries "lacked anti-corruption compliance programs and internal accounting controls," the SEC said. 

"It took Kinross Gold almost three years to implement adequate controls, despite multiple internal audits flagging widespread deficiencies," according to the SEC order.

Even after adopting the controls, Kinross failed to maintain them, the SEC said. 

For example, Kinross awarded a logistics contract to a company "preferred by Mauritanian government officials."

It contracted with a consultant who had "contacts with high-level Mauritanian government officials." Despite the links to government officials, Kinross didn't conduct "required, heightened due diligence" on the consultant. 

And Kinross paid vendors and consultants without making sure the payments were consistent with its anti-bribery compliance policy, the SEC said.

In its securities filing Monday, Kinross said the FCPA investigations and SEC settlement were concluded without any material adverse effect on the company’s financial position or business operations.

"Kinross cooperated fully with the SEC throughout the investigation and has taken steps to improve and strengthen its compliance program and internal accounting controls and practices," the filing said.
 
Kinross learned about the Africa allegations through a whistleblower.

The SEC investigation started in March 2014 and the DOJ investigation started in December 2014.

Kinross first disclosed the investigations in October 2015.

In addition to Mauritania and Ghana, the company has mines and projects in the United States, Brazil, Russia, and Chile.

It trades on the New York Stock Exchange under the symbol KGC and on the Toronto Stock Exchange under the symbol K.

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Richard L. Cassin is the publisher and editor of the FCPA Blog.