SEC v. Douglas A. Murphy, David G. Kay and Lawrence H. Theriot (S.D. Tex. 2002)

• Case Name
• SEC v. Douglas A. Murphy, David G. Kay and Lawrence H. Theriot (S.D. Tex. 2002)

• Date Filed
• 11/30/2016

• Enforcement Agency
• SEC

• Foreign Official
• Haitian customs and tax officials.

• Date of Conduct
• 2007 to 2015

• Nature of Business
• American Rice, Inc. (“ARI”) has a Haitian subsidiary, Rice Corporation of Haiti (“RCH”), engaged in the import of rice to Haiti.  ARI is a Texas corporation and a U.S. issuer.  Douglas A. Murphy is the former president of American Rice, and David Kay is the former Vice President.  Lawrence H. Theriot is a former consultant to American Rice.

• Influence to be Obtained
• False shipping documents reducing the amount of customs duties and sales taxes due to Haitian authorities.

• Enforcement
• On July 30, 2002, the SEC filed a civil injunctive action against two former officers of ARI.  The complaint asked that Kay and Murphy each pay $187,000 in civil penalties, and that Theriot pay $11,000 and asks that all three defendants be enjoined from committing further violations.  The civil litigation was stayed pending the outcome of criminal prosecutions against Kay and Murphy.  Both were found guilty of, inter alia, violations of the FCPA.  A consent judgment against Theriot, which enjoined him from future violations of the FCPA and imposed a fine of $11,000, was entered on December 30, 2004.
  
  In addition, on January 30, 2003, the SEC issued an order against ARI, Joseph A. Schwartz, Jr., a former controller for Haiti operations, Joel R. Malebrance and Allen W. Sturdivant, former employees of ARI.  The order found that Schwartz, Malebrance and Sturdivant had participated in the scheme to bribe Haitian customs officials in violation of the FCPA.  In the order, ARI, Schwartz, Malebrance and Sturdivant agreed to cease‑and‑desist from committing or causing any violation and any future violation of the Securities Exchange Act of 1934.  ARI, Schwartz, Malebrance and Sturdivant consented to the order without admitting or denying its findings.

• Amount of the Value
• The alleged bribes ranged from $25,000 to $72,000 and totaled more than $528,000.

• Amount of Business Related to Payment
• The alleged bribes saved the company more than $1.5 million dollars in Haitian import tax.

• Intermediary
• None

• Citizenship of Parent Entity
• Haiti

• Compliance Monitor
• No

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 13,998

• Related Enforcement Actions
• United States v. Int’l Material Solutions Corp. and Thomas K. Qualey (S.D. Ohio 1999)
  United States v. David Kay and Douglas Murphy (S.D. Tex. 2002)
  

Douglas A. Murphy

• Citation
• SEC v. Murphy, No. 4:02-cv-02908) (S.D. Tex. 2002).

• Date Filed
• 09/30/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Aiding and Abetting: Anti-Bribery
  • Aiding and Abetting: Books-and-Records
  • Aiding and Abetting: Internal Controls
  • Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Agent of Issuer

• Defendant's Citizenship
• United States

David G. Kay

• Citation
• SEC v. Murphy, No. 4:02-cv-02908) (S.D. Tex. 2002).

• Date Filed
• 09/30/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Aiding and Abetting: Books-and-Records
  • Aiding and Abetting: Internal Controls
  • Anti-Bribery
  • Books-and-Records
  • Internal Controls

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Agent of Issuer

• Defendant's Citizenship
• United States

Lawrence H. Theriot

• Citation
• SEC v. Murphy, No. 4:02-cv-02908) (S.D. Tex. 2002).

• Date Filed
• 09/30/2016

• Filed Under Seal
• No

• FCPA Statutory Provision
• • Aiding and Abetting: Anti-Bribery

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Agent of Issuer

• Defendant's Citizenship
• United States