Sec Cryptocurrency Colombian Conglomerate Grupo Aval and Its Bank Subsidiary to Pay $40 Million to Settle FCPA Violations

The Securities and Exchange Commission today charged Colombian conglomerate Grupo Aval Acciones y Valores S.A., aka Grupo Aval S.A., and its bank subsidiary, Corporación Financiera Colombiana S.A. (Corficolombiana), with violating the Foreign Corrupt Practices Act (FCPA). Grupo Aval, whose shares are traded on the New York Stock Exchange, agreed to pay $40 million to settle the SEC charges.

According to the SEC’s order, Corficolombiana and a joint venture partner won a contract from the Colombian government for a 328-mile highway infrastructure project in Colombia. The SEC alleges that Corficolombiana, through its former president and with the joint venture partner, bribed government officials in Colombia to win an extension to the contract. At least $28 million in illicit payments were paid with the knowledge, approval, and assistance of Corficolombiana’s former president. According to the SEC’s order, Corficolombiana caused Grupo Aval’s violations and provided Grupo Aval with an improper financial benefit totaling approximately $32 million.

“Lax control environments are fertile ground for mischief, as illustrated here where bribes were funded through payments made for invoices lacking supporting documentation and contracts for vaguely described services typically handled internally rather than by third parties,” said Charles Cain, the SEC’s FCPA Unit Chief. “This case once again highlights the importance of issuers having sufficient internal accounting controls over third-party payments.” 

Grupo Aval and Corficolombiana consented to a cease-and-desist order finding that they violated the accounting provisions and, in the case of Corficolombiana, the anti-bribery provisions of the FCPA. In determining to accept the offer, the SEC considered Grupo Aval’s cooperation and remediation.

Corficolombiana also agreed to enter into a deferred prosecution agreement with the U.S. Department of Justice and to pay more than $20 million to settle criminal charges.

The SEC’s investigation was conducted by Ernesto Palacios, Maria F. Boodoo, and Thierry Olivier Desmet of the SEC’s FCPA Unit, with assistance from James Connor. The SEC acknowledges the assistance of the Colombian Superintendent of Industry and Commerce.