GREENVILLE, SC – (BUSINESS WIRE) – World Acceptance Corporation (NASDAQ: WRLD) (“the Company”) today announced that it has entered into an agreement with the Securities and Exchange Commission and the Department of Justice to resolve allegations primarily concerning the former subsidiary of the Company in Mexico.
The agreement concludes investigations into alleged violations of the law on corrupt practices abroad involving the former subsidiary of the company WAC de Mexico, SA de CV until June 2017. The company has improved its operations and its management since the allegations were made, including appointing R. Chad Prashad as President and CEO; appoint Luke J. Umstetter as general counsel, chief compliance officer and secretary; and the sale of its Mexican subsidiary in July 2018. The Company no longer has any foreign subsidiaries and does not carry out any activity outside the United States.
“We are pleased to reach these resolutions which reflect the full and solid cooperation of the company in this area,” said Luke Umstetter. “After conducting a thorough independent investigation by our board of directors and addressing these past issues, we come away with a renewed focus on operating our business with integrity and in compliance with applicable laws and regulations.”
“Since selling our overseas businesses over two years ago, our team has focused on designing and delivering affordable credit solutions that help people achieve their financial goals,” said Chad Prashad, President and CEO. “We are happy to put this issue behind us and believe we are well positioned for the future.”
Under the settlement with the SEC, the company agreed to repay approximately $ 17.8 million earned by the Viva division of its former Mexican subsidiary and to pay an additional $ 3.9 million in pre-judgment interest and civil penalties. This amount is in accordance with the accrual accounting previously disclosed and recorded by the company. The SEC resolution recognizes WAC’s corrective actions and cooperation. In connection with this settlement, the Company has neither admitted nor denied the underlying allegations.
The US Department of Justice (“DOJ”) also released a letter refusing to prosecute the company and closing its investigation into the company citing, among other things, the grounds for this decision: misconduct; The full and proactive cooperation of the world in this area (including its communication of all known relevant facts concerning the fault); and the complete clean-up of World, including additional FCPA training added to World’s compliance program, the separation of officers under whom the misconduct occurred; and termination of relationships with third parties in Mexico involved in the misconduct.
About World Acceptance Corporation
Founded in 1962, the World Acceptance Corporation (NASDAQ: WRLD), based in Greenville, South Carolina, is one of the largest small loan consumer finance companies in North America. The company offers short and medium term installment loans, related credit insurance and a range of ancillary financial products and services to individuals which may include those with limited access to other sources of consumer credit. For more information visit www.loansbyworld.com.
Caution regarding forward-looking information
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent the Company’s current expectations or beliefs regarding future events. Statements other than those of historical fact are forward-looking statements and relate to matters which are inherently subject to risks and uncertainties. The actual results and financial condition of the Company may differ materially from those indicated in forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors which could cause actual results or performance to differ from expectations expressed or implied in these forward-looking statements are discussed in Part I, point 1A. “Risk Factors” in the company’s latest annual report on Form 10-K for the fiscal year ended March 31, 2020, filed with the SEC and other company reports filed or provided to the SEC from time to time . The Company assumes no obligation to update any forward-looking statements it makes. The Company is also not responsible for updating any information contained in this press release beyond the date of publication, or for changes made to this document by wireline or Internet services.