The $123 million would go to pay for what Herbalife calls “aggregate penalties, disgorgement and prejudgment interest.The SEC settlement would involve entering into an administrative resolution “with respect to alleged violations of the books and records and internal controls provisions of the FCPA.”
The Justice settlement would involve a deferred prosecution agreement under which the department “would defer criminal prosecution of the company for a period of three years related to a conspiracy to violate the books and records provisions of the FCPA.”
Herbalife has agreed to compliance self-reporting obligations for the three-year term of the respective agreements.
If Herbalife remains in compliance with the Justice agreement, the deferred charge would be dismissed permanently.
Herbalife set aside $40 million in accrual during the fourth quarter toward a potential settlement. It set aside an additional $83 million in the first quarter.
Four years ago, Herbalife agreed in July 2016 to pay a $200 million penalty and restructure its U.S. operations to settle what the Federal Trade Commission termed as “unfair and deceptive practices.”