SEC Settles FCPA Claims With Oil Companies, Global Freight Forwarding Company For $237M

WASHINGTON, D.C. - (Mealey's) The Securities and Exchange Commission has reached an approximately $237 million settlement with six oil service industry companies and global freight forwarding company Panalpina Inc., which are alleged to have bribed foreign officials "to receive preferential treatment and improper benefits during the customs process" in violation of the Foreign Corrupt Practices Act (FCPA), according to a press release issued Nov. 4 by the SEC.

Under the terms of the settlement, which are subject to court approval, Panalpina and oil service industry companies Pride International Inc., Tidewater Inc., Transocean Inc., GlobalSanteFe Corp. and Noble Corp., without admitting or denying the allegations, agreed to pay approximately $80 million in disgorgement, interest and penalties plus $156.5 million in fines to settle related criminal proceedings with the U.S. Department of Justice.

Specifically, each of the defendants has agreed to an injunction, and:

• Panalpina will pay $11,329,369 in disgorgement in the SEC case and will pay a criminal fine of $70.56 million;

• Pride International will pay disgorgement and prejudgment interest in the amount of $23,529,718 in the SEC case and will pay a criminal fine of $32,625,000;

• Tidewater will pay $8,104,362 in disgorgement and a criminal fine of $7.35 million;

• Transocean will pay disgorgement in the amount of $7,265,080 and a criminal fine of $13.44 million;

• GlobalSanteFe will pay disgorgement in the amount of $3,758,165 and a criminal fine of $2.1 million;

• Noble Corp. will pay disgorgement in the amount of $5,576,998 and a criminal fine of $2.59 million; and

• Royal Dutch Shell agreed to a cease-and-desist order and will pay disgorgement in the amount of $18,149,459 and a criminal fine of $30 million.

The SEC charged the defendants with violations of Sections of 13(b)(2)(A), 13(b)(2)(B) and 30A of the Securities Exchange Act of 1934 in connection with their alleged "brib[ing] customs officials in more than 10 countries in exchange for such perks as avoiding applicable customs duties on imported goods, expediting the importation of goods and equipment, extending drilling contracts, and lowering tax assessments."

According to the press release, "The companies also paid bribes to obtain false documentation related to temporary import permits for oil drilling rigs, and enable the release of drilling rigs and other equipment from customs officials."

An additional claim for aiding and abetting in violation of Section 30A also was made.

The press release is available online at http://www.sec.gov/news/press/2010/2010-214.htm.

[Editor's Note:  Full coverage will be in the November issue.  For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]

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For more information, call editor Timothy J. Raub at 215-988-7740, or e-mail him at timothy.raub@lexisnexis.com.