AGCO to pay over $20 M to resolve SEC violations

Washington-Major agricultural equipment manufacturer AGCO Corp., Duluth, Ga., has agreed to pay more than $20 million to settle charges brought by the U.S. Securities and Exchange Commission. The charges cite violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act (FCPA), alleging that certain subsidiaries made approximately $5.9 million in kickback payments related to their sales of humanitarian goods to Iraq under the United Nations Oil for Food Program. The violations pertained to sales of farm equipment between 2001-2003. “AGCO paid kickbacks to win business illegally, and attempted to hide them by creating a fictional account on their books,” said Cheryl Scarboro, associate director in the SEC’s Division of Enforcement. AGCO, without admitting or denying the allegations in the Commission’s complaint, consented to the entry of a final judgment permanently enjoining AGCO from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and ordering AGCO to disgorge $13.9 million in profits, plus $2 million in pre-judgment interest and a penalty of $2.4 million. AGCO will also pay a $1.6 million penalty pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section. In addition, AGCO will enter into a criminal disposition in which the Danish State Prosecutor for Serious Economic Crime will confiscate more than $600,000. The SEC considered remedial acts promptly undertaken by AGCO and the cooperation the company afforded the SEC staff in its investigation. To date, the SEC has brought 12 Oil for Food-related cases, with more than $150 million in monetary relief obtained.