SEC Settles FCPA Action On The Eve of Trial
The SEC was about to try its first FCPA case. Then the Commission settled, agreeing to drop the bribery charges as well as its demand for monetary sanctions. That ended the case against two Nobel Corporation executives SEC v. Jackson, Civil Action No. 4:12-cv-00563 (S.D. Tx. Filed Feb. 24, 2012) .
The action named as defendants Mark Jackson, former CEO of Noble Corporation and James Ruehlen, current Director and Division Manager of the firm’s subsidiary in Nigeria. The charges arise from a sweep of the oil services industry in late 2010. At that time Noble Corporation was charged with FCPA violations. The firm entered into a non-prosecution agreement with the Department of Justice and settled with the SEC (here).
Messrs. Jackson and Ruehlen were involved with arrangements to keep certain drilling equipment in Nigeria, according to the complaint. Specifically, the arrangement involved temporary import permits which allowed the rigs to be in the country for one year. Officials could grant up to three extensions of six months each. After that the rigs had to be exported and then re-imported under a new temporary permit. This required the payment of sizable duties.
Messrs. Jackson and Ruehlen are alleged to have arranged and facilitated the payment of bribes to induce Nigerian customs officials to grant new permits and extend others. The two men arranged to have paid hundreds of thousands of dollars in bribes to obtain eleven illicit permits and twenty-nine extensions, the SEC claimed. Mr. Jackson is also alleged to have approved the bribe payments and concealed them from the audit committee and auditors. Mr. Ruehlen prepared false documents for the bribes, according to the charging papers.
The complaint naming Messrs. Jackson and Ruehlen alleges violations of Exchange Act Sections 30A, 13(b)(2)(A), 13(b)(2)(B), 13(b)(5) and Rule 13a – 14, false certifications. The relief sought included injunctions and financial penalties.
To resolve the case the Mr. Jackson agreed to the entry of an injunction based on Exchange Action Sections 13(b)(2)(A) and 20(a). All other charges were dropped. No monetary penalty was ordered.
Mr. Ruehlen agreed also agreed to settle, consenting to the entry of an injunction based on Exchange Act Section 13(b)(2)(A). All other charges were dropped. No monetary penalty was ordered.
At the time the SEC filed its action against Messrs. Jackson and Ruehlen it also charged Nobel employee Thomas O’Rourke, former controller and head of internal audit. SEC v. O’Rourke, Civil Action No. 4:12-cv-00564 (S.D.Tx. Filed Feb. 24, 2012). The complaint against Mr. O’Rourke claimed he aided and abetted the violations by the company of the bribery, books and records and internal control provisions of the FCPA and that he directly violated the internal control and false records provisions of the Exchange Act. Mr. O’Rourke settled with the SEC, consenting to the entry of a permanent injunction, without admitting or denying the allegations in the complaint, which prohibits future violations of Exchange Act Sections 13(b)(2)(A), 12(b)(2)(B), 12(b)(5) and 30A. He also agreed to pay a civil penalty of $35,000.