Jump to content Jump to menu
Why Register?

Shearman FCPA Website: Cases Logo Shearman & Sterling LLP FCPA.Shearman.com: The One-Stop Resource on the Foreign Corrupt Practices Act

SEC v. Montedison, S.p.A.

 
:
Montedison - Montedison S.p.A.
:
SEC Civil
:
November 21, 1996
:
SEC v. Montedison, S.p.A.
:
SEC v. Montedison, S.P.A., No. 1:96-CV-02631, (D.D.C. 1996)
:
This case was one of the first cases focusing on bribery brought by the SEC against a foreign issuer. The bribes formed the basis for the books and records violations and were allegedly paid by an Italian company to Italian politicians using offshore subsidiaries. It is, therefore, a unique FCPA case, as the bribes in question were paid by a foreign company to a foreign official in the same country, i.e., the officials were not "foreign" to the company.
:
Conglomerate/Diversified Holding Company
:
Italy
:
1988; 1989; 1990; 1991; 1992; 1993
:
Italian politicians
:
Montedison entered into numerous real estate transactions at artificially inflated prices, using the proceeds to make illegal payments through a real estate developer to Italian politicians in connection with a dispute over control of a joint venture. In an attempt to conceal these payments, as well as other areas of fraudulent conduct, Montedison artificially inflated its financial statement, concealing losses of nearly $400M. This fraudulent behavior continued undetected for years because of Montedison's lack of internal controls.

The SEC charged Montedison with violation of the antifraud provisions of the Exchange Act. After contesting the complaint through summary judgment, Montedision settled in 2002, without admitting or denying guilt. Montedison--which, at the time of the final judgment, had been acquired by Compart--agreed to pay a civil penalty of $300,000.
:
Books and records (Issuer), Internal controls (Issuer)
:
Securities Fraud
:
Civil penalty
:
Civil penalty of $300,000
:
300,000
:
0
:
Foreign
:
Contract Procurement/Retention
:
Not stated.
:
Shell entity
:
272,000,000
:
Italy
:
No