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SEC v. Innospec, Inc.

 
:
Innospec, Inc.
:
SEC Civil
:
March 18, 2010
:
SEC v. Innospec, Inc.
:
SEC v. Innospec, 1:10-cv-00448 (D.D.C. 2010)
:
This case is the first corruption-related settlement coordinated between the SEC, DOJ, and the United Kingdom's Serious Fraud Office ("SFO"). The SEC, DOJ, and SFO have agreed to the appointment of a joint monitor.
:
Chemicals
:
Indonesia, Iraq
:
2000; 2001; 2002; 2003; 2004; 2005; 2006; 2007
:
Iraqi government officials (Ministry of Oil) and Indonesian government officials (Ministry of Energy and Mineral Resources) and officials of state-owned oil and gas companies in Indonesia (BP Migas and Pertamina).
:
On March 18, 2010, the SEC filed a settled enforcement action charging Innospec, Inc., a specialty chemical company incorporated in Delaware with principal offices in the United States and the United Kingdom, with violations of the anti-bribery, books and records, and internal controls provisions of the FCPA.

According to the SEC's complaint, from 2000 to 2007 Innospec paid more than $6.3 million in bribes and promised another $2.8 million in illicit payments to Iraqi and Indonesian government officials to obtain contracts for sales of tetraethyl lead (TEL).

The SEC alleges that Innospec's Swiss subsidiary, Alcor, obtained contracts in the United Nations Oil for Food Program by paying kickbacks to Iraq and Iraqi officials through an Iraqi agent. According the SEC, Innospec continued to use the Iraqi agent after the Oil for Food Program ended to pay bribes to Iraqi officials, including officials at the Ministry of Oil, to secure TEL business from Iraq. Allegedly, the Iraqi agent also made payments to ensure the failure of a field test of a competitor's product. According to the SEC, Innospec also paid for lavish trips for Iraqi officials, including a honeymoon to Thailand for one and "pocket money" for others while on the trips.

The SEC alleges Innospec paid bribes to Indonesia government officials and officials at state-owed oil companies to win contracts for the sale of TEL to state-owned oil and gas companies in Indonesia. The Indonesian Agent submitted fictitious invoices, and the payments were falsely recorded as "legal fees" and "sales commissions."

Without admitting or denying any of the SEC's allegations, Innospec has offered to pay $40.2 million as part of a global settlement with the SEC, the DOJ, the United Kingdom’s Serious Fraud Office ("SFO"), and the U.S. Department of the Treasury’s Office of Foreign Assets Control ("OFAC"). Innospec agreed to pay disgorgement of $11.2 million to the SEC, a criminal fine of $14.1 million to the DOJ, a criminal fine of $12.7 million to the SFO and $2.2 million to OFAC. Innospec also agreed to injunctive relief and certain undertakings regarding its FCPA compliance program, including an independent monitor for three years.
:
Anti-bribery (Issuer), Books and records (Issuer), Internal controls (Issuer)
:
Civil Settlement, Compliance Monitor, Disgorgement, Injunction/Cease and desist
:
Disgorgement of $11,200,000 to the SEC, a criminal fine of $14,100,000 to the DOJ, a criminal fine of $12,700,000 to the United Kingdom's Serious Fraud Office, and $2,200,000 to the Office of Foreign Asset Control. Innospec also agreed to injunctive relief and certain undertakings regarding its FCPA compliance program, including an independent monitor for three years.
:
40,200,000
:
0
:
Issuer
:
U.S.
:
Contract Procurement/Retention
:
176,717,341
:
Cash, Entertainment, Gifts, Meals, Travel, Wire/check
:
Sales Agent/Consultant
:
6,347,588
:
Indonesia, Switzerland
:
Singapore, Switzerland
:
No
:
United Kingdom