SEC CHARGES FCPA COMPLIANCE OFFICER WITH VIOLATIONS

The SEC brought an FCPA action against Bobby Benton, the Vice President of Western Hemisphere Operations of Pride International, Inc. Mr. Benton was responsible for FCPA compliance in his region. Pride is one of the world’s largest offshore drilling companies. SEC v. Benton, Civil Action No. 4:09-cv-03953 (S.D. Tex. Filed Dec. 11, 2009).

The SEC’s complaint, which is in litigation, alleges that Mr. Benton covered up evidence of bribes, authorized another and executed false FCPA certifications. According to the Commission, in mid-2003 the company country manager for Venezuela authorized payments of $60,000 per month to an intermediary to secure the extension of a contract with Petroleos de Venezuela S.A., the state owned oil company. The payments were intended for an official of the company. Additional payments were made in May 2004 to ensure that the contract was not blocked.

Subsequently, in early 2005 the country manager for Venezuela furnished Mr. Benton with a draft action plan to address certain internal control weaknesses uncovered by a Pride internal audit. The draft plan included information about the payments made to the oil company official. Mr. Benton redacted all references to the bribes. The revised plan was submitted to the internal and external auditors by Mr. Benton.

In December 2004, Mr. Benton authorized the payment of $10,000 in cash to a purported customs official. This payment was made to secure more favorable treatment in connection with certain alleged customs violation. The payment was booked as an electricity maintenance expense.

Later that same month, Mr. Benton learned about a bribe paid to a Mexican customs official in connection with the export of machinery. Nevertheless, he failed to report it to the internal or external auditors or the legal department.

On March 3 and 5, 2005, defendant Benton executed FCPA certifications. In the certifications, Mr. Benton represented that he knew of no bribes paid to government officials to obtain or retain business or violations of the FCPA.

The Commission’s complaint alleges violations of Exchange Act Sections 30A, 13(b)(5), 13(b)(2)(A) and the pertinent rules. The investigation of this matter is continuing. See also Litig. Rel. 21335 (Dec. 11, 2009). The case is one of a series of FCPA actions brought in recent years by the SEC.