Network marketing giant Herbalife has announced an agreement in principle with US authorities over a bribery scandal in China. The reported pact, which includes a $123 million fine, was part of the company’s first quarter earnings report, which came in better than expected.
The agreement relates to a The US Department of Justice and the US Securities and Exchange Commission investigation of Herbalife’s business practices within China prior to 2016. In Herbalife’s recently filed 10-Q form pertaining to the company’s first quarter of fiscal 2020 the company revealed the tentative agreement with federal authorities. The case was filed over alleged violations of the Foreign Corrupt Practices Act that is meant to restrain US companies from engaging in activities in foreign markets, such as the payment of bribes, that are prohibited by US law.
In that document Herbalife said it would, “[E]nter into an administrative resolution with the SEC with respect to alleged violations of the books and records and internal controls provisions of the FCPA. The Company would separately enter into a deferred prosecution agreement (“DPA”) with DOJ, under which DOJ would defer criminal prosecution of the Company for a period of three years related to a conspiracy to violate the books and records provisions of the FCPA.”