As recently reported in Compliance Week and the FCPA Blog, Avon disclosed in its quarterly earnings report that it could pay up to $132 million to settle civil and criminal charges stemming from potential violations of the Foreign Corrupt Practices Act ("FCPA") in China. Last year, the SEC rejected Avon's settlement offer of $12 million because it reportedly sought an amount "significantly higher."
Avon alerted the Department of Justice and Securities and Exchange Commission in 2008 that it was conducting an internal investigation of its China operations to determine if there were FCPA violations in the wake of tips that certain travel, entertainment and other expenses may have been improperly incurred in connection with the company's China operations. The government's investigation of Avon began in 2011. That year, Avon fired four executives connected to the bribery probe. Shareholders filed a lawsuit in May 2012 alleging that Avon improperly paid a big severance to a former internal audit head to buy his silence about the China bribes.
Avon has spent an eyebrow-raising $300 million on "professional and related fees" associated with the FCPA investigation since 2009.