Washington D.C., April 20, 2022 —The Securities and Exchange Commission today announced charges against Stericycle, Inc. for violations of the Foreign Corrupt Practices Act (FCPA) arising out of bribery schemes that took place in Argentina, Brazil, and Mexico. The company has agreed to pay more than $84 million to settle parallel civil and criminal charges related to these schemes, including nearly $28.2 million to settle the SEC’s charges.
The SEC’s order finds that Stericycle, a leading provider of medical waste and other services in 16 countries worldwide, paid millions of dollars in bribes to obtain and maintain business from government customers in Brazil, Mexico, and Argentina from at least 2012 to 2016. According to the SEC’s order, Stericycle staff kept and emailed spreadsheets that identified government customers who received bribes. The bribes were referred to with code names, including “alfa” – short for alfajores, a sweet cookie popular in Argentina. The scheme also included sham third-party vendors who used false invoices to conceal cash payments to government clients. Stericycle also failed to have sufficient internal accounting controls in place, such as a centralized compliance department, to prevent or even detect the misconduct, and failed to implement its FCPA policies or procedures prior to 2016.
“Stericycle rapidly expanded in Latin America without any meaningful oversight or compliance measures, as evidenced by widespread bribery schemes lasting for many years in most of its Latin America operations,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “Companies in pursuit of global expansion cannot disregard the need for appropriate controls.”
Stericycle consented to the SEC’s cease-and-desist order that it violated the anti-bribery, books and records, and internal accounting controls provisions of the FCPA, and agreed to pay approximately $28.2 million in disgorgement and prejudgment interest. The SEC’s order provides for an offset of up to approximately $4.2 million of any disgorgement paid to Brazilian authorities. Therefore, the company’s minimum payment to the SEC would be approximately $24 million. Stericycle must also retain an independent corporate monitor for two years followed by one year of self-reporting.
Have a securities law question? Call New York Securities Lawyers at 212-509-6544.