In the Matter of Key Energy Services, Inc. (2016)  

• Case Name
• In the Matter of Key Energy Services, Inc. (2016)  

• Date Filed
• 08/11/2016

• Enforcement Agency
• SEC

• Countries
• Mexico

• Foreign Official
• Contract employee at the Mexican state-owned oil company, Petróleos Mexicanos.

• Date of Conduct
• 2010 to 2013

• Nature of Business
• Key Energy is a Maryland corporation headquartered in Houston, Texas.  Key Energy maintains a class of common stock listed on the New York Stock Exchange.  Key Mexico is a wholly owned subsidiary of Key Energy that operates in Mexico.  Key Mexico’s financial results were included in Key Energy’s consolidated financial statements.

• Influence to be Obtained
• From August 2010 through at least April 2013, Key Mexico allegedly made improper payments to a contract employee from Pemex in exchange for inside information, as well as advice on Pemex contracts.  Specifically, according to the SEC, in August 2010, Key Mexico hired a consulting firm to provide “expert advice on contracts with . . . Pemex.”  Over the course of three years, the SEC claims that Key Mexico paid the consulting firm at least $229,000.  In exchange, the Pemex employee provided Key Mexico with non-public information regarding upcoming Pemex tenders and lobbied internally for lucrative amendments to Key Mexico’s contracts with Pemex.
  
  The SEC claims that Key Mexico’s country manager knew that the consulting firm had connections to a Pemex contract employee to whom Key Mexico’s payments would be funneled.  Further, as early as 2011, Key Energy personnel allegedly became aware that Key Mexico was doing business with the consulting firm, yet Key Energy failed to conduct the required due diligence.

• Enforcement
• On August 11, 2016, the SEC announced that it had settled the charges against Key Energy through a cease-and-desist order.  According to the SEC, Key Energy would disgorge $5 million in ill-gotten gains for violations of the FCPA’s books-and-records and internal controls provisions. Earlier, in May 2016, the company announced that the DOJ had closed its investigation and declined to bring an enforcement action.

• Amount of the Value
• Approximately $284,000.

• Amount of Business Related to Payment
• Approximately $125 million.

• Intermediary
• Agent/Consultant.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 5,000,000

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 5,000,000

Key Energy Services, Inc.

• Citation
• In the Matter of Key Energy Services, Inc., Admin. Proc. File No. 3-17379 (Aug. 11, 2016).

• Date Filed
• 08/11/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Cease-and-Desist Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States