Kinross Gold Charged With FCPA Violations
Kinross Gold Corporation, a Canada-based mining company, violated the FCPA by failing to implement and maintain adequate internal controls over its African subsidiaries acquired in a $7.1 billion deal, enabling improper payments to politically connected vendors and consultants, and agreed to a $950,000 penalty and one-year reporting requirement without admitting or denying guilt.
The SEC charged Kinross Gold Corporation with violating the books and records and internal accounting controls provisions of the federal securities laws under the FCPA, stemming from systemic failures at two African subsidiaries acquired in a $7.1 billion transaction in 2010. Despite repeated internal audits flagging deficiencies, Kinross took nearly three years to implement adequate controls and subsequently failed to maintain them, allowing improper payments—including a non-competitive logistics contract awarded to a government-favored vendor and payments to a politically connected consultant without due diligence. Without admitting or denying the findings, Kinross agreed to a cease-and-desist order, a $950,000 civil penalty, and a one-year undertaking to report on its remediation efforts.
Kinross Gold Corporation, a Canada-based mining company, violated the Foreign Corrupt Practices Act by failing to implement and maintain adequate internal accounting controls over two African subsidiaries it acquired in a $7.1 billion transaction in 2010. The company was aware at the time of acquisition that the subsidiaries lacked anti-corruption compliance programs, yet it took nearly three years to remediate these deficiencies, despite multiple internal audits highlighting widespread control failures. Even after implementing controls, Kinross failed to sustain them, permitting improper payments such as a lucrative logistics contract awarded to a vendor preferred by Mauritanian government officials—despite its high cost and poor technical capabilities—and payments to a politically connected consultant without required heightened due diligence. The company also made vendor and consultant payments inconsistent with its policies prohibiting improper disbursements, enabling potential bribery and misuse of corporate funds. The SEC found these actions constituted violations of the books and records and internal controls provisions of the federal securities laws. Without admitting or denying the allegations, Kinross agreed to a cease-and-desist order, a $950,000 civil penalty, and a one-year undertaking to report on its remediation progress. The SEC’s FCPA Unit, led by investigators Steven A. Susswein and Maria Boodoo, emphasized the critical need for robust post-acquisition compliance oversight to prevent misuse of corporate funds.
Exhibits & Attached Documents (1)
Extracted insights
- $7.10B $7.1 billion ≥$1B
- $950K $950,000 $100K–$1M
- person kinross gold
- company Kinross Gold Corporation
- agency sec’s investigation
- agency sec’s order
- agency Securities and Exchange Commission
- person tracy l. price
- Securities and Exchange Commission Announced a settled action against Canada-based Kinross Gold Corporation for Foreign Corrupt Practices Act violations
- Kinross Gold Corporation Acquired the African subsidiaries in a $7.1 billion transaction in 2010
- Kinross Gold Failed to implement adequate accounting controls of two African subsidiaries
- Kinross Gold Awarded a lucrative logistics contract to a company preferred by Mauritanian government officials
- Kinross Gold Contracted with a politically-connected consultant to facilitate contacts with high-level Mauritanian government officials
- Kinross Gold Paid vendors and consultants without ensuring the payments were consistent with policies prohibiting improper payments
- Tracy L. Price Said Companies should take particular care to remediate known accounting controls issues when making acquisitions to mitigate the risk that company funds will be misused for unauthorized purposes
- SEC’s order Finds Kinross Gold violated books and records and internal accounting controls provisions of the federal securities laws
- Kinross Gold Agreed to a cease-and-desist order, a penalty of $950,000 and undertakings to report on its remedial steps for a period of one year
- SEC’s investigation Was conducted by Steven A. Susswein and Maria Boodoo of the FCPA Unit with assistance from Gregory Bockin
The Securities and Exchange Commission today announced a settled action against Canada-based Kinross Gold Corporation for Foreign Corrupt Practices Act violations arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries. According to the SEC’s order instituting a settled administrative proceeding, Kinross Gold acquired the African subsidiaries in a $7.1 billion transaction in 2010, understanding that the subsidiaries lacked anti-corruption compliance programs and internal accounting controls. It took Kinross Gold almost three years to implement adequate controls, despite multiple internal audits flagging widespread deficiencies. Even after implementing the controls, Kinross Gold failed to maintain them. Among other things, Kinross Gold is found to have awarded a lucrative logistics contract to a company preferred by Mauritanian government officials, despite concerns that the company was a high-cost provider with poor technical capabilities, in contravention of Kinross Gold’s bidding and tendering procedures. Kinross Gold also contracted with a politically-connected consultant to facilitate contacts with high-level Mauritanian government officials without conducting required, heightened due diligence. In addition, the company paid vendors and consultants without ensuring the payments were consistent with policies prohibiting improper payments. “Companies should take particular care to remediate known accounting controls issues when making acquisitions to mitigate the risk that company funds will be misused for unauthorized purposes,” said Tracy L. Price, Deputy Chief of the SEC Enforcement Division’s FCPA Unit. The SEC’s order finds that Kinross Gold violated books and records and internal accounting controls provisions of the federal securities laws. Without admitting or denying the findings, Kinross agreed to a cease-and-desist order, a penalty of $950,000 and undertakings to report on its remedial steps for a period of one year. The SEC’s investigation was conducted by Steven A. Susswein and Maria Boodoo of the FCPA Unit with assistance from Gregory Bockin.
The Securities and Exchange Commission today announced a settled action against Canada-based Kinross Gold Corporation for Foreign Corrupt Practices Act violations arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries. According to the SEC’s order instituting a settled administrative proceeding, Kinross Gold acquired the African subsidiaries in a $7.1 billion transaction in 2010, understanding that the subsidiaries lacked anti-corruption compliance programs and internal accounting controls. It took Kinross Gold almost three years to implement adequate controls, despite multiple internal audits flagging widespread deficiencies. Even after implementing the controls, Kinross Gold failed to maintain them. Among other things, Kinross Gold is found to have awarded a lucrative logistics contract to a company preferred by Mauritanian government officials, despite concerns that the company was a high-cost provider with poor technical capabilities, in contravention of Kinross Gold’s bidding and tendering procedures. Kinross Gold also contracted with a politically-connected consultant to facilitate contacts with high-level Mauritanian government officials without conducting required, heightened due diligence. In addition, the company paid vendors and consultants without ensuring the payments were consistent with policies prohibiting improper payments. “Companies should take particular care to remediate known accounting controls issues when making acquisitions to mitigate the risk that company funds will be misused for unauthorized purposes,” said Tracy L. Price, Deputy Chief of the SEC Enforcement Division’s FCPA Unit. The SEC’s order finds that Kinross Gold violated books and records and internal accounting controls provisions of the federal securities laws. Without admitting or denying the findings, Kinross agreed to a cease-and-desist order, a penalty of $950,000 and undertakings to report on its remedial steps for a period of one year. The SEC’s investigation was conducted by Steven A. Susswein and Maria Boodoo of the FCPA Unit with assistance from Gregory Bockin.