SEC v. Pride International, Inc. (S.D. Tex. 2010)

• Case Name
• SEC v. Pride International, Inc. (S.D. Tex. 2010)

• Date Filed
• 11/10/2010

• Countries
• India, Mexico, Venezuela, Kazakhstan, Nigeria, Saudi Arabia, Libya, Congo, Repub. of the

• Foreign Official
• Officials at Petróleos de Venezuela S.A., a Venezuelan state-owned oil company; judges at the Customs, Excise, and Gold Appellate Tribunal, an administrative tribunal in India; Mexican customs officials; Kazakh customs and tax authorities; Nigerian customs and tax officials; Saudi customs officials; Congolese Merchant Marine officials; Libyan social security agency officials.

• Date of Conduct
• 2003 to 2005

• Nature of Business
• Pride International Inc. (“Pride”), a Delaware corporation, owns and operates numerous oil and gas drilling rigs throughout the world. 

• Influence to be Obtained
• From 2003 to 2005, Pride allegedly paid bribes to foreign officials in eight different countries to obtain various benefits related to oil services. 
  
  In Venezuela, Pride’s Venezuelan subsidiary allegedly paid bribes totaling approximately $414,000 to officials in Venezuela’s state‑owned oil company to secure extensions of drilling contracts and the payment of receivables. 
  
  In India, Pride’s Indian subsidiary allegedly paid approximately $500,000 to Indian administrative judges to secure a favorable ruling in a customs litigation involving Pride.
  
  In Mexico, Pride’s Mexican subsidiary allegedly paid a $10,000 bribe to Mexican customs officials to obtain favorable treatment in an inspection. 
  In Kazakhstan, Pride’s Kazakh subsidiary allegedly paid bribes totaling $364,000 through a freight forwarding agent and a tax consultant to Kazakh government officials to reduce customs‑related penalties and taxes, and to otherwise obtain favorable customs treatment.
  
  In Nigeria, Pride’s Nigerian subsidiary allegedly paid bribes totaling at least $202,000 to Nigerian customs and tax officials through freight forwarder and tax agents to circumvent import permit requirements, avoid customs inspections and duties, and to reduce taxes.
  
  In Saudi Arabia, Pride’s Saudi subsidiary allegedly paid a $10,000 bribe to a Saudi customs official to assure expedited customs clearance of a rig that Pride’s Saudi affiliate was seeking to import into Saudi Arabia.
  
  In the Republic of Congo, Pride’s Congolese subsidiary allegedly made a payment of $8,000 to a Congolese Merchant Marine official to resolve a paperwork deficiency and thus avoid an official penalty.
  
  In Libya, Pride’s Libyan subsidiary allegedly made payments totaling $116,000, through an unidentified third‑party tax agent, to Libyan social security agency officials to reduce social security taxes and penalties.
  
  Pride voluntarily disclosed to the DOJ and SEC possible FCPA violations discovered in a routine audit.  While the SEC complaint does not specifically identify the freight forwarder Pride used in Nigeria and Kazakhstan, the DOJ noted in a press release that, during the course of its cooperation with the DOJ and SEC, Pride provided information and in the investigation of Panalpina World Transport (Holding) Ltd. (“Panalpina”).

• Enforcement
• On November 4, 2010, without admitting or denying the SEC’s findings, Pride consented to entry of an order of judgment against it.  Under the order, Pride must cease and desist from further violations of the anti‑bribery, books and records, and internal controls provisions of the FCPA and pay disgorgement of $19,341,870.  On the same day, Pride also entered into a deferred prosecution agreement with the DOJ and its French subsidiary, Pride Forasol S.A.S., pleaded guilty to related charges.
  
  Also on November 4, 2010, Panalpina and three of Panalpina’s customers in the oil exploration and production industry pleaded guilty to and settled related charges with the DOJ and SEC. 

• Amount of the Value
• Approximately $2 million.

• Amount of Business Related to Payment
• Approximately $19.3 million.

• Intermediary
• Subsidiary company, agent, freight forwarder, consultant.

• Citizenship of Parent Entity
• United States

• Total Sanction
• $ 17,529,718

• Compliance Monitor
• Yes

• Reporting Requirements
• No

• Case is Pending?
• No

• Total Combined Monetary Sanction
• $ 50,154,718

• Related Enforcement Actions
• United States v. Pride International Inc. (S.D. Tex. 2010)
  United States v. Pride Forasol S.A.S. (S.D. Tex. 2010)
  SEC v. Bobby Benton (S.D. Tex. 2009)
  SEC v. Joe Summers (S.D. Tex. 2010)
  

Pride International, Inc.

• Citation
• SEC v. Pride Int’l,Inc., No. 10-cv-4335 (S.D. Tex. 2010).

• Date Filed
• 11/10/2010

• Filed Under Seal
• No

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

• Other Statutory Provision
• None

• Disposition
• Complaint and Consent Order

• Defendant Jurisdictional Basis
• Issuer

• Defendant's Citizenship
• United States