By David Dykes

World Acceptance Corporation (NASDAQ: WRLD) said it has reached an agreement with the Securities and Exchange Commission and the U.S. Department of Justice to pay $21.7 million to resolve allegations primarily involving the company’s former subsidiary in Mexico.

In a statement and a regulatory filing, the company said the agreement concludes investigations into alleged violations of the Foreign Corrupt Practices Act (FCPA) involving the company’s former WAC de Mexico, S.A. de C.V. subsidiary through June 2017.

The company said it has made improvements in operations and management since the allegations were made, including naming R. Chad Prashad president and chief executive officer; Luke J. Umstetter general counsel, chief compliance officer and secretary; and selling its Mexican subsidiary in July 2018.

The company said it has no remaining foreign subsidiaries, and it conducts no business outside of the United States.

“Since selling our foreign businesses over two years ago, our team has been focused on designing and offering affordable credit solutions that help people realize their financial goals,” Prashad said. “We are pleased to put this matter behind us and believe we are well positioned for the future.”

“We are pleased to reach these resolutions which reflect the company’s full and robust cooperation in this matter,” Umstetter said. “Having undertaken an extensive independent investigation led by our board and addressing these past issues, we emerge with a renewed focus on operating our business with integrity and in compliance with applicable laws and regulations.”

The Department of Justice also made public a letter declining to prosecute the company and closing its investigation into the company, citing as the bases for the decision, among other things, World’s prompt, voluntary self-disclosure of the misconduct; World’s full and proactive cooperation in the matter (including its provision of all known relevant facts about the misconduct); and World’s full remediation, including additional FCPA training added to World’s compliance program, separation from executives under whom the alleged misconduct took place; and discontinuing relationships with the involved third parties in Mexico.

In their letter, included in the company’s regulatory filing, Justice officials said their investigation found evidence that beginning in 2010 and continuing through 2017, World’s Mexican subsidiary, through its employees and agents, paid millions to third-party intermediaries.

The payments were used, in part, to pay bribes to Mexican union officials and state government officials, the Justice officials said.

Under the terms of the settlement with the SEC, the company said it agreed to disgorge approximately $17.8 million earned by the Viva division of its former Mexican subsidiary and pay an additional $3.9 million in prejudgment interest and civil penalties.

The amount is consistent with the accrual previously disclosed and recorded by the company, World officials said.

An SEC resolution accompanying the company’s regulatory filing acknowledged World’s remedial acts and cooperation. In connection with the settlement, the company said it has neither admitted nor denied the underlying allegations.

In an interview with Greenville Business Magazine last year, Prashad said he was leading the effort to accelerate growth, rebrand the company’s image and hunt for potential acquisitions. 

In addition, the company was moving its corporate headquarters from Frederick Street off South Pleasantburg Drive in Greenville to the Poinsett Plaza office tower downtown. 

Founded in 1962, Greenville, S.C.-based World is one of North America's largest small-loan consumer finance companies. The company offers short and medium-term installment loans, related credit insurance and a range of ancillary financial products and services to individuals that may include those with limited access to other sources of consumer credit.