SEC Settles FCPA Allegations with CEO of Chile-Based Airline
On February 4, 2016, the SEC announced a settlement with the CEO of Chile-based LAN Airlines S.A. and its holding company Latam Airlines Group SA, Ignacio Cueto Plaza, regarding his approval of the payment of over $1.15 million to an Argentinian consultant in connection with LAN Airlines attempts to settle disputes over wages and work conditions with employees in Argentina. According to the SEC, Cueto knew that a portion of these payments might be passed on to union officials in Argentina and that the actual services agreed to in the underlying consulting agreement would not be performed. Without admitting or denying the SECs findings, Cueto agreed to pay a $75,000 penalty and "certify his compliance with his airlines policies and procedures by attending anti-corruption training among other undertakings." In its administrative cease and desist order, the SEC found that Cueto violated both the FCPAs internal accounting controls and books and records provisions. The company has said that this was an isolated matter, that it cooperated with the SECs investigation, and strengthened its accounting controls since the incident took place.