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SEC fines gaming company $4 million as successor to a company charged with FCPA violations

Securities Financial Crimes SEC FCPA Bribery Of Interest to Non-US Persons Securities Exchange Act


On March 6, the SEC announced that an Ireland-based global gaming and sports betting company, as successor-in-interest to a company it acquired in 2020 (the “acquired company”), agreed to pay a $4 million civil money penalty to settle claims that the acquired company violated the books and records and internal accounting controls provisions of the FCPA by using third-party consultants in Russia. According to the SEC’s order, the acquired company operated several gaming brands, including an online poker website. The SEC said that between May 26, 2015 and May 15, 2020, while the acquired company’s shares were registered with the SEC, it paid roughly $8.9 million to consultants in Russia in an effort to legalize poker in the country. During this time period, the SEC explained, the acquired company lacked sufficient internal accounting controls over its Russian operations with respect to third-party consultants, and failed to “consistently make and keep accurate books and records regarding its consultant payments in Russia.” Many of these third-party consultants, the SEC said, were “retained without adequate due diligence or written contracts, and paid without adequate proof of services.” The order indicated that certain payments were inaccurately recorded as lobbying fees, and that some payments went towards reimbursements for gifts given to individuals, including Russian government officials, and to a Russian state agency responsible for administering internet censorship filters. The SEC charged the Ireland company, as successor-in-interest to the acquired company, with violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934. The resolution requires the Ireland company, which neither admitted nor denied the allegations, to pay a $4 million civil money penalty. The SEC recognized the Ireland company’s cooperation and remedial efforts.