Earlier this year the Securities and Exchange Commission announced a new initiative encouraging cooperation. They wanted to start using Cooperation Agreements, Deferred Prosecution Agreements, and Non-prosecution Agreements.
They finally got use one of their shiny new tools. The SEC announced that Tenaris S.A. entered into a Deferred Prosecution Agreement.
The SEC alleged that Tenaris, a global manufacturer of steel pipe products, violated the Foreign Corrupt Practices Act by bribing Uzbekistan government officials during a bidding process to supply pipelines for transporting oil and natural gas. Tenaris made almost $5 million in profits from those contracts. As part of the DPA, the SEC is requiring Tenaris to cough up $5.4 million.
In addition to paying cast, Tenaris needs to do the following under the DPA:
- Cooperate with SEC in the investigation
- Not break the law
- Not claim a tax break or seek an insurance claim for $5.4 million penalty
- Update its code of conduct annually
- Require each director, officer and management-level employee to certify compliance with the code of conduct
- Train employees on the FCPA
- Tenaris to Pay $5.4 Million in SEC’s First-Ever Deferred Prosecution Agreement – SEC Press release
- Deferred Prosecution Agreement with Tenaris (.pdf)
- SEC’s Cooperation Initiative
- SEC’s New Enforcement Cooperation Initiative – prior post in Compliance Building