SEC v. Aon Corporation (D.D.C 2011)

• Case Name
• SEC v. Aon Corporation (D.D.C 2011)

• Date Filed
• 12/22/2011

• Enforcement Agency
• SEC

• Countries
• Bangladesh, Costa Rica, Egypt, Indonesia, Myanmar, United Arab Emirates, Vietnam

• Foreign Official
• Officials at a government-owned reinsurance company in Costa Rica; Officials at the Egyptian Armament Authority, an Egyptian government-owned company, and its U.S. arm, the Egyptian Procurement Office; Unnamed individuals associated with Vietnam Airlines; Unnamed Indonesian government officials; Senior Manager at Myanmar Insurance, a government-owned entity; the son of a high-ranking government official in Bangladesh.

• Date of Conduct
• 2006 to 2013

• Nature of Business
• Aon Corporation is a Delaware corporation that provides risk management services, insurance, and reinsurance brokerage worldwide.  Its common stock is registered with the SEC pursuant to Section 12(b) of the Exchange Act and is listed on the New York Stock Exchange.

• Influence to be Obtained
• The SEC alleged that, from 1983 until 2007, Aon’s subsidiaries made over $3.6 million in improper payments to various parties as a means of obtaining or retaining insurance business in Costa Rica, Egypt, Vietnam, Indonesia, the United Arab Emirates, Myanmar, and Bangladesh.  The improper payments allegedly made by Aon’s subsidiaries fall into two general categories:  (i) training, travel, and entertainment provided to employees of foreign government-owned clients and third parties; and (ii) payments made to third-party facilitators.  The complaint alleges that none of these payments were accurately reflected in Aon’s books and records and that Aon failed to maintain an adequate internal control system designed to detect and prevent the improper payments.
  
  In Costa Rica, Aon’s U.K. subsidiary, Aon Limited, allegedly administered two funds which disbursed approximately $865,000 to pay for travel and entertainment expenses for officials at the Instituto Nacional de Seguros (“INS”), a government-owned reinsurance company.  The purported purpose of the funds was to provide training and education for INS employees, but a substantial number of the expenses served no legitimate business purpose.  The majority of the amounts paid out by the two funds were to a tourism company in Costa Rica with which the director of reinsurance at INS was connected.
  
  The SEC further alleges that, from 1998 through 2007, Aon Risk Services paid $100,000 to fund trips to the United States for a delegation of officials from the Egyptian Armament Authority and the Egyptian Procurement Office, an Egyptian government-owned company for which Aon served as an insurance broker.  The SEC alleged that these delegation trips included a disproportionate amount of leisure activities and lasted longer than their business component would justify.
  
  The SEC also alleges that Aon’s subsidiaries made payments to third-party facilitators in Vietnam, Indonesia, the United Arab Emirates, Myanmar, and Bangladesh in connection with prospective accounts with government-owned companies.  The third parties appeared to have performed no legitimate services in relation to these accounts.  Certain employees of Aon subsidiaries were allegedly aware that part of the payments to these third parties would ultimately be funneled to officials at the government-owned entities to secure and retain business for Aon’s subsidiaries.

• Enforcement
• Without admitting or denying the allegations, Aon consented to the entry of a final judgment permanently enjoining it from future violations of the books and records and internal control provisions of the FCPA and ordering the company to pay $14,545,020 in disgorgement and prejudgment interest.  Separately, Aon entered into a non-prosecution agreement with the DOJ and agreed to pay a $1.764 million penalty.

• Amount of the Value
• Approximately $6,235,000.

• Amount of Business Related to Payment
• Not Stated

• Intermediary
• Third‑party travel agencies/consultants.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 14,545,020

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 16,309,020

• Related Enforcement Actions
• In re Aon Corporation (2011)
  

Aon Corporation

• Citation
• SEC v. Aon Corp., No. 1:11-cv-02256 (D.D.C. Dec. 22, 2011).

• Date Filed
• 12/22/2011

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States