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  • Halliburton Agrees to Settle FCPA Claim for $29 Million in Disgorgement and Penalties

    Halliburton Company recently settled allegations that the company improperly steered business to the friend of an Angolan official in exchange for that official awarding various oil contracts to the company. In total, Halliburton agreed to pay the SEC $29.2 million, comprising $14 million in disgorgement, $1.2 million in prejudgment interest, and a $14 million penalty. Halliburton’s former vice president also agreed to pay the SEC a $75,000 penalty related to these violations and other accounting irregularities.  

    This is the most recent settlement in a series of FCPA enforcement actions focusing on Halliburton’s procurement processes and operations in various countries. Former Halliburton subsidiary KBR settled similar FCPA allegations in 2009 related to alleged bribes paid to Nigerian officials to procure contracts in that country.    

    This settlement also highlights the role of whistleblowers in driving FCPA and other enforcement actions. A Halliburton whistleblower first alerted the company to potential FCPA issues in 2010, which resulted in the launching of an investigation into the allegations.

    SEC FCPA Enforcement Action Angola Disgorgement Bribery Nigeria Whistleblower

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  • DOJ Declines FCPA Action Against Cobalt International Energy

    Houston-based Cobalt International Energy, Inc. announced in a February 9, 2017 press release that the DOJ had formally closed its FCPA investigation into Cobalt’s oil exploration operations in Angola and would not prosecute the Company.  The press release noted that the DOJ’s investigation “was the last remaining FCPA investigation by any U.S. regulatory agency into Cobalt’s Angolan operations.”  The DOJ’s declination letter came more than two years after the SEC closed its own FCPA investigation and declined to bring an enforcement action.

    As detailed in a previous FCPA Scorecard post, the parallel investigations began in 2011, and were prompted by allegations concerning the connection between senior Angolan government officials and Nazaki Oil and Gáz, S.A., the local partner in a Cobalt-led deepwater oil venture.  According to Cobalt’s 10-K filing for FY 2012, the Company had voluntarily contacted the DOJ when the SEC launched its initial inquiry and “offered to respond to any requests the DOJ may have.”

    DOJ SEC Cobalt International Energy Angola

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  • General Cable Discloses Reserve for Potential Disgorgement to SEC over FCPA

    Recently, General Cable Corp. disclosed in an 8-K/A that it had accrued a $24 million reserve related to potential disgorgement the company anticipates having to pay the SEC related to an investigation of its sales activities in Angola.  The reserve did not include any provision for potential fines or penalties.  General Cable previously announced both the inception and near resolution of its internal investigation into potential FCPA concerns in Angola, Thailand, India, and Portugal (see prior FCPA Scorecard coverage).

    India Thailand Angola Portugal

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  • SEC Settles With Global Manufacturer Over FCPA Violations

    On February 24, the SEC announced charges against a global manufacturer for alleged violations of the FCPA involving bribes paid by its African subsidiaries in order to make sales in Kenya and Angola. Over the course of a four-year period, the manufacturer allegedly failed to detect more than $3.2 million in bribes paid in cash to employees of private companies, government-owned entities, and other local authorities, including police or city council officials. According to the SEC Order, the manufacturer maintained “inadequate FCPA compliance controls,” allowing improper payments to be recorded as legitimate business expenses, which violated the books, records, and internal control provisions of the Securities Exchange Act of 1934. Under the terms of the settlement, the manufacturer will pay over $16 million to settle the SEC’s allegations and report its FCPA remediation efforts to the SEC for three years.

    Settlement Angola Kenya

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  • SEC Declines Enforcement Against Cobalt in FCPA Investigation

    Houston-based Cobalt International Energy, Inc. announced in a January 28, 2015 press release that it has received a termination letter from the SEC advising the company that the SEC’s FCPA investigation relating to operations in Angola has concluded and agency staff did not intend to recommend any enforcement action. This notice formally concludes the SEC’s investigation which, as detailed in a previous FCPA Scorecard post, began in response to allegations concerning the connection between Angolan officials and Nazaki Oil and Gáz, the local partner in a Cobalt-led deepwater oil venture. The government officials admitted owning shares in the joint venture but denied using their influence to award Cobalt oil-exploration rights in Angola.  The SEC’s inquiry, which began in 2011, was later joined by the Department of Justice.  The company had previously “strongly refuted” allegations of wrongdoing and had said it was forced to enter into a joint venture with two Angolan-based oil exploration and production companies as part of its deal with the Angolan government. While the SEC has concluded its investigation, the DOJ’s parallel investigation is ongoing.

    Cobalt International Energy Angola

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  • General Cable Announces FCPA Internal Investigation Near Completion

    Just a month after announcing its internal investigation of possible FCPA violations, news reports indicate that General Cable Corporation’s review will be completed or substantially completed by the first quarter of 2015.  The company also announced that it “plans to exit all of its Asia Pacific and African manufacturing operations,” although it did not link the exit – which affects nine plants in Asia and five plants in Africa, and approximately 17% of its total sales – to its FCPA investigation. In September, the Kentucky-based cable manufacturer announced that it was investigating its payment practices with respect to employees of public utility companies in Angola, Thailand, India and Portugal due to possible FCPA concerns.  News reports indicate that, to date, the company has spent millions on the review, which has included a review of over 450,000 documents and interviews of over 20 individuals.  The company also disclosed that it was cooperating with investigations by the DOJ and SEC.

    India Thailand Africa Angola General Cable Portugal Internal Investigation

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  • General Cable Investigates its Angola, Thailand, Indian, and Portugal Operations

    In a Form 8-K filed on September 22, General Cable Corporation stated that it is reviewing its payment practices with respect to employees of public utility companies in Angola, Thailand, India and Portugal due to possible FCPA concerns.  The cable manufacturer, which is based in Kentucky, determined that “certain employees in [its] Portugal and Angola subsidiaries directly or indirectly made payments at various times from 2002 through 2013 to officials of Angola government-owned public utilities that raise concerns under the FCPA and possibly under the laws of other jurisdictions.”  The investigation also covers General Cable’s use and payment of agents in Thailand and India, which the company also believes may have implications under the FCPA or other laws.  According to General Cable’s filing, it voluntarily disclosed the issues to the SEC and the DOJ, whose investigations are ongoing.

    India Thailand Angola General Cable Portugal

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  • Cobalt International Energy Targeted in SEC FCPA Inquiry

    Houston-based Cobalt International Energy, Inc. said in an August 5, 2014 securities filing that it received a Wells Notice in connection with the Securities and Exchange Commission’s investigation of its oil-exploration operations in Angola. The Company stated in its filing that due to the SEC’s investigation and recommendation, it may be “exposed to liabilities under the U.S. Foreign Corrupt Practices Act.” Wells Notices indicate that the staff of the SEC has made a preliminary determination to recommend an enforcement action alleging violations of certain federal securities laws. According to Cobalt’s 2013 10-K filing, the SEC first began an informal inquiry of the company in March 2011 which was later joined by the Department of Justice. In April 2012, as first reported by the Financial Times, allegations surfaced that three Angolan officials, including the head of the country’s state-owned oil company and two military generals, held shares in Nazaki Oil and Gáz, the local partner in a Cobalt-led deepwater oil venture launched in early 2010. The government officials admitted owning shares in the joint venture but denied using their influence to award Cobalt oil-exploration rights in Angola. The company has previously “strongly refuted” allegations of wrongdoing and has said it was forced to enter into a joint venture with two Angolan-based oil exploration and production companies as part of its deal with the Angolan government.

    Cobalt International Energy Angola

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