Tuesday, October 20, 2020

World Acceptance Corp. reserves $21.7 million to settle bribery probe

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World Acceptance Corp. will likely spend $21.7 million to resolve a bribery probe by the U.S. Securities and Exchange Commission, the company said on Thursday.

A consumer lender based in Greenville, S.C., World Acceptance said in announcing its fourth-quarter results that the sum represented the estimated cost of resolving an SEC investigation into the company’s compliance with the Foreign Corrupt Practices Act.

The probe, which the company has previously disclosed, was prompted by an anonymous letter it received about certain compliance matters. A spokeswoman said on Thursday that the company had cooperated fully with the government’s investigation.

After receiving the letter, World Acceptance retained outside counsel and forensic accountants to investigate its Mexico operations, the company has said. The investigation focused on the legality of certain payments related to loans and the treatment of compensation for certain employees under both the FCPA and local laws.

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The company has been in discussions with the SEC since at least January when it proposed paying $8 million to resolve the regulator’s investigation.

World Acceptance said it contacted the SEC and the Justice Department in 2017 to notify them of its internal investigation. It said it has yet to receive an offer of settlement or resolution from the Justice Department.

World Acceptance posted net income of $23.7 million in its fourth-quarter ended March 31 after accounting for the estimated cost of resolving the SEC’s bribery probe, which caused the company’s income to decline 37.6%. The company sold its Mexico operations in 2018.

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