Tyson Foods, Inc.
U.S. Securities and Exchange Commission
Litigation Release No. 21851 / February 10, 2011
Securities and Exchange Commission v. Tyson Foods, Inc., Civ. No. 1:11-CV-00350 (D.D.C).
SEC Charges Tyson Foods With FCPA Violations; Tyson Foods to Pay Disgorgement Plus Pre-judgment Interest of More Than $1.2 million; Tyson Foods to Pay Criminal Penalty of $4 Million
The Securities and Exchange Commission announced today that it filed a settled civil action against Tyson Foods, Inc., the world's largest meat protein company and the second-largest food production company in the Fortune 500, charging it with violations of the Foreign Corrupt Practices Act (FCPA).
According to the SEC's complaint, Tyson Foods' subsidiary, Tyson de Mexico, made improper payments during fiscal years 2004 to 2006 to two Mexican government veterinarians responsible for certifying its chicken products for export sales. Tyson de Mexico initially concealed the improper payments by putting the veterinarians' wives on its payroll while they performed no services for the company. The wives were later removed from the payroll and payments were then reflected in invoices submitted to Tyson de Mexico by one of the veterinarians for "services." Tyson de Mexico paid the veterinarians a total of $100,311. It was not until two years after Tyson Foods' officials first learned about the subsidiary's illicit payments that its counsel instructed Tyson de Mexico to cease making the payments.
The SEC alleges that in connection with these improper payments, Tyson Foods failed to keep accurate books and records and failed to implement a system of effective internal controls to prevent the salary payments to phantom employees and the payment of illicit invoices. The improper payments were improperly recorded as legitimate expenses in Tyson de Mexico's books and records and included in Tyson de Mexico's reported financial results for fiscal years 2004, 2005 and 2006. Tyson de Mexico's financial results were, in turn, a component of Tyson Foods' consolidated financial statements filed with the SEC for those years.
Without admitting or denying the SEC's allegations, Tyson Foods consented to the entry of a final judgment ordering disgorgement plus pre-judgment interest of more than $1.2 million and permanently enjoining it from violating the anti-bribery, books and records, and internal controls provisions of the FCPA, codified as Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. The proposed settlement is subject to court approval.
In a related criminal proceeding announced today, the U.S. Department of Justice charged Tyson Foods with conspiring to violate the FCPA and violating the FCPA. DOJ and Tyson Foods agreed to resolve the charges by entering into a deferred prosecution agreement. Tyson Foods has agreed to pay a $4 million criminal penalty.
The Commission acknowledges the assistance of the U.S. Department of Justice's Fraud Section and the Federal Bureau of Investigation.
Last Reviewed or Updated: June 27, 2023