On National Drink Beer Day, SEC Announces Action Against Anheuser-Busch InBev

Anheuser-Busch InBev will pay $6 million to settle SEC charges “it violated the Foreign Corrupt Practices Act (FCPA) and chilled a whistleblower who reported the misconduct,” the SEC said.

The SEC’s announcement came on National Drink Beer Day. Whether the timing of the announcement was a coincidence was not immediately clear.

At issue, according to the SEC order dated Sept. 28 was improper payments made government officials in India to expand the market share of Crown beer.

“Anheuser-Busch InBev recorded improper payments by its sales promoters in India as legitimate expenses in its financial accounting, and then exacerbated the problem by including language in a separation agreement that chilled an employee from communicating with the SEC,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit.

“Threat of financial punishment for whistleblowing is unacceptable,” said Jane Norberg, acting chief of the SEC’s Office of the Whistleblower.  “We will continue to take a hard look at these types of provisions and fact patterns.”

The whistleblower stopped talking to the agency after entering into the separation agreement, which could have imposed a $250,000 penalty for continuing to talk, according to the SEC.

“After signing the Separation Agreement, the Crown Employee, who was previously voluntarily communicating directly with the Commission staff, stopped doing so,” the SEC said. “The Crown Employee stopped doing so because he believed that he was prohibited by the recently executed Separation Agreement and any violation of the Separation Agreement would risk triggering the Separation Agreement’s liquidated damages provision. Only after the Commission issued an administrative subpoena for testimony and documents did the Crown Employee resume communicating directly with the Commission staff.”

At the time of this PP Blog post, #NationalDrinkBeerDay was a trending Twitter hashtag.

Anheuser-Busch InBev of Belgium owns Budweiser and other major brands. The company acknowledged no wrongdoing, but is making compliance changes, according to the SEC.