Corporate Governance Is Key to Avon’s FCPA-Related Civil Settlements

The ramifications of corporate FCPA cases often extend beyond a settlement with the DOJ or SEC, as evidenced by the civil cases against Avon. The company, which resolved FCPA charges in December 2014 with the DOJ and SEC for $135 million, recently announced that it has settled several pending shareholder derivative and books and records lawsuits stemming from those FCPA allegations. The actions include claims for failure to comply with the FCPA, inadequate internal controls, breach of fiduciary duty, corporate waste and unjust enrichment. In addition to mutual releases, and the payment by Avon of a portion of the plaintiffs’ legal fees, a cornerstone of the settlement is Avon’s undertaking to adopt or maintain certain corporate governance measures aimed at assuring FCPA compliance. See also “Avon Class Action Dismissal Illustrates Challenges of FCPA-Related Shareholder Derivative Suits” (Oct. 22, 2014).

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