SEC Charges John Deere With FCPA Violations for its Subsidiary's Role in Thai Bribery Scheme

SEC Charges John Deere

The Securities and Exchange Commission yesterday announced that Deere & Company, which does business as John Deere, agreed to pay nearly $10 million to resolve SEC charges that it violated the Foreign Corrupt Practices Act (FCPA) arising out of bribes paid by its wholly owned subsidiary, Wirtgen Thailand. The company is an Illinois-based global manufacturer of agricultural machinery and heavy equipment.

Details of the Charges

The SEC’s order finds that, 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. They also bribed employees of a private company to secure sales to that company. The improper payments, which included cash payments, massage parlor visits, and international travel for the government officials and private company employees, resulted in Wirtgen Thailand making approximately $4.3 million in profits as a result of these bribes.

According to the SEC’s order, these improper payments were inaccurately recorded as legitimate expenses in John Deere's books and records.

Compliance Failures Cited

“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.”

Consequences for John Deere

The SEC’s order found that Deere violated the recordkeeping and internal accounting controls provisions of the FCPA. Without admitting or denying the SEC’s findings, Deere consented to the entry of the SEC’s order requiring it to cease and desist from further violations. Deere will pay disgorgement and prejudgment interest totaling approximately $5.4 million along with a civil penalty of $4.5 million.