On September 10, the U.S. Securities and Exchange Commission (SEC) announced that Deere & Company, which does business as John Deere, agreed to pay nearly $10 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA). The SEC alleges that Wirtgen Thailand, a wholly owned subsidiary of John Deere, paid bribes in Thailand in order to obtain business.
According to the SEC, “from at least late 2017 through 2020, Wirtgen Thailand employees bribed Thai government officials with the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads to win multiple government contracts and also bribed employees of a private company to win sales to that company.”
These bribes allegedly included cash payments, massage parlor visits, and international travel and were inaccurately recorded as legitimate expenses in John Deere’s books and records. The SEC thus charged John Deere with violating the recordkeeping and internal accounting controls provisions of the FCPA.
“After acquiring Wirtgen Thailand in 2017, Deere failed to timely integrate it into its existing compliance and controls environment, resulting in these bribery schemes going unchecked for several years,” said Charles E. Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “This action is a reminder for corporations to promptly ensure newly acquired subsidiaries have all the necessary internal accounting control processes in place.”
The Dodd-Frank Act, which established the SEC Whistleblower Program, extended whistleblower provisions to the FCPA. Individuals can disclose information relevant to potential FCPA violations to the SEC.
Through the SEC Whistleblower Program, qualified SEC whistleblowers, individuals who voluntarily report original information that leads to a successful enforcement action, are eligible to receive monetary awards of 10-30% of the funds collected by the government.
With its transnational reach, the SEC Whistleblower Program has attracted disclosures on foreign bribery and other violations from thousands of whistleblowers from across the globe. According to whistleblower advocates, however, the SEC’s whistleblower rules unfairly discriminate against international whistleblowers. Advocates are therefore calling on the SEC to revise its rules around the eligibility of whistleblowers who report to the media and through other channels.
Leading whistleblower Stephen M. Kohn sees the revision of the SEC’s eligibility rules as one of the seven most urgently needed whistleblower reforms. National Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on the SEC to revise its rulemaking.
Join NWC in Taking Action:
Reform the SEC Whistleblower Program
Further Reading:
SEC Charges John Deere With FCPA Violations for Subsidiary’s Role in Thai Bribery Scheme
