Stericycle reaches FCPA settlement “in principle”

In its annual report issued on February 24, 2022, Stericycle Inc., an Illinois-based medical waste disposal company, stated that it had reached an agreement “in principle” with the US Department of Justice and the US Securities and Exchange Commission to resolve an investigation into the company’s compliance with the Foreign Corrupt Practices Act with respect to conduct in Latin America. 

Stericycle first disclosed the investigation in 2017, reporting that on June 12, 2017, the SEC had issued a subpoena requesting documents and information about the company’s operations in Latin America, and that the DOJ was conducting a parallel investigation.  Stericycle also noted it was conducting an internal investigation into the company’s compliance with the FCPA in Latin America and elsewhere, and that this investigation had found evidence of improper conduct.  No further information was provided as to the improper conduct.  In August 2021, the company stated that it was in preliminary discussions with US enforcement authorities to resolve their investigations.

In its annual report filed on February 24, 2022, Stericycle says that it has reached agreements in principle with the DOJ and the SEC.  The proposed settlement with the DOJ is a three-year Deferred Prosecution Agreement under which the company would pay $52.5 million in criminal fines for conspiring to violate the anti-bribery and books and records provisions of the FCPA.  The proposed settlement with the SEC would be an administrative settlement for violations of the anti-bribery, books and records, and internal controls provisions of the FCPA, with Stericycle paying $28.2 million in disgorgement and pre-judgment interest.  Under both settlements, Stericycle would be required to retain an independent monitor for two years followed by a year of self-reporting. 

According to Stericycle, parallel negotiations are underway with Brazilian authorities to resolve alleged anti-bribery offenses under Brazilian law.  If a settlement is reached, some of the payments made to the Brazilian authorities may offset a portion of the monetary penalties paid to the DOJ and the SEC. 

In addition to these matters, Stericycle reported that the United States Attorney for the Southern District of New York is conducting an investigation into potential False Claims Act violations by Stericycle in connection with the collection, transportation, and disposal of hazardous waste by a former business unit of the company.

Form 10-K

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