The Securities and Exchange Commission today announced that South American-based Airlines has agreed to pay more than $22 million to settle parallel civil and criminal cases related to improper payments it authorized during a dispute between the airline and its union employees in Argentina.
An SEC investigation found that when the airlines encountered problems negotiating labor agreements with the unions, it was contacted by a consultant from Argentina who offered to negotiate on the company’s behalf. The consultant made clear that he would expect compensation for such negotiations, and that payments would be made to third parties who had influence over the unions. The airlines CEO approved $1.15 million in payments to the consultant through a sham contract for a purported study of existing air routes in Argentina. The CEO knew that no actual study would be performed and that it was possible the consultant would pass some portion of the money to union officials in Argentina to settle the wage disputes.
To settle the SEC’s charges that it failed to keep accurate books and records and maintain adequate internal accounting controls, the airline agreed to pay $9.4 million in disgorgement and prejudgment interest. In a deferred prosecution agreement announced today by the U.S. Department of Justice, the airline agreed to pay a $12.75 million penalty.
To read the entire Press Release please follow this link: $22M for FCPA Violations
An SEC investigation found that when the airlines encountered problems negotiating labor agreements with the unions, it was contacted by a consultant from Argentina who offered to negotiate on the company’s behalf. The consultant made clear that he would expect compensation for such negotiations, and that payments would be made to third parties who had influence over the unions. The airlines CEO approved $1.15 million in payments to the consultant through a sham contract for a purported study of existing air routes in Argentina. The CEO knew that no actual study would be performed and that it was possible the consultant would pass some portion of the money to union officials in Argentina to settle the wage disputes.
To settle the SEC’s charges that it failed to keep accurate books and records and maintain adequate internal accounting controls, the airline agreed to pay $9.4 million in disgorgement and prejudgment interest. In a deferred prosecution agreement announced today by the U.S. Department of Justice, the airline agreed to pay a $12.75 million penalty.
To read the entire Press Release please follow this link: $22M for FCPA Violations
