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In re Oil States International, Inc.

 
:
Oil States
:
SEC Civil
:
April 27, 2006
:
In re Oil States International, Inc.
:
In the Matter of Oil States International, Inc., SEC Administrative Proceeding File No. 3-12280 (April 27, 2006)
:
Energy (Non-Utility)-Oil & Gas-Other/Multi
:
Venezuela
:
2003; 2004
:
A wholly owned Oil States subsidiary made payments to employees of Petroleos de Venezuelan (PDVSA), a government-owned Venezuela energy company.
:
Oil States International, Inc. ("Oil States") settled this action with the SEC without admitting or denying the following facts alleged in the SEC's complaint.

The SEC issued a cease-and-desist order against Oil States, because employees of a wholly-owned Oil States subsidiary accepted and paid inflated invoices from a consultant for the purposes of making improper payments to Petroleos de Venezuela (PDVSA), a government-owned Venezuelan energy company. The subsidiary's employees' recording of the charges as genuine violated the FCPA's regulations on keeping accurate books and records, and Oil States's failure to implement training and compliance programs violated the FCPA's regulations on internal controls.

Oil States's wholly-owned subsidiary Hydraulic Well Control ("HWC") hired a Venezuelan consultant help it work effectively with PDVSA. In December 2003, three PDVSA employees approached the consultant and asked the consultant to submit inflated bills to HWC for his services and pay excess funds to the PDVSA employees. If the consultant had refused, the PDVSA employees threatened to stop or delay HWC's work. The consultant told three HWC employees about the scheme, and the HWC employees agreed to accept inflated invoices. From December 2003 to November 2004 HWC provided approximately $348,350 in improper payments to the consultant, who in turn paid the PDVSA employees.

HWC improperly recorded the payments to the PDVSA employees as ordinary business expenses on its books, records, and accounts. Oil States and HWC both failed to take steps to train or otherwise ensure that the consultant and HWC employees complied with the FCPA.
:
Books and records (Issuer), Internal controls (Issuer)
:
Injunction/Cease and desist
:
The SEC imposed the sanctions agreed to in Oil States's Offer of Settlement. However, it did not assign a civil fine or disgorgement penalty due, in large part, to the strong remedial measures undertaken and cooperation afforded the Commission by Oil States.
:
Not stated.
:
0
:
Issuer
:
U.S.
:
Contract Procurement/Retention
:
Not stated.
:
Wire/check
:
Sales Agent/Consultant
:
348,350
:
Venezuela
:
United States
:
No
:
No