Selected Enforcement Actions
Oilfield services firm settles FCPA charges. Weatherford International has settled charges that it violated the Foreign Corrupt Practices Act by allegedly paying bribes to and authorizing improper travel and entertainment for foreign officials in the Middle East and Africa, including the payment of kickbacks in Iraq to obtain United Nations Oil-for-Food contracts. The company allegedly gained more than US$59.3 million in profit from business obtained through improper payments, and more than US$30 million in profit from its improper sales to sanctioned countries. Weatherford agreed to pay more than US$250 million to settle the SEC’s charges and parallel actions by the US Department of Justice’s Fraud Section, the US Attorney’s Office for the Southern District of Texas, the US Commerce Department’s Bureau of Industry and Security, and the US Treasury’s Office of Foreign Assets Control. (11/26/2013) SEC v. Weatherford International Ltd., Lit.Rel.No. 22880.
Investment advisers charged with fraud. The SEC instituted contested administrative proceedings against two investment advisers for failing to inform clients about compensation received from offshore funds they were recommending as safe investments despite substantial risks and red flags. The advisers also are charged with contributing to violations of the “custody rule” that requires investment advisory firms to establish specific procedures to safeguard and account for client assets. (11/20/2013) SEC press release.
Private investment adviser fined for compliance failures. The SEC instituted settled administrative proceedings against Agamas Capital Management, LP for willful violations of the Investment Advisers Act. Without admitting or denying the allegations, Agamas consented to the entry of an order finding that it failed to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act concerning three areas of private fund management: (i) valuation of fund assets, (ii) the accuracy of disclosures to fund investors about the valuation practice, and (iii) cross trades between clients. Among other things, the order requires Agamas to pay a civil penalty of US$250,000. (11/19/2013) In the Matter of Agamas Capital Management, LP, SEC Release No. IA-3719.
Staff announcements. The SEC announced the appointment of Julie K. Lutz as director of the Denver Regional Office, where she will oversee enforcement and examinations in a seven-state region. (11/20/2013) The agency also announced that it has named Sebastian Gomez Abero as chief of the Office of Small Business Policy. (12/9/2013)
SEC Commissioner seeks market structure review. According to the Financial Times, SEC Commissioner Michael Piwowar has joined Commissioners Daniel Gallagher and Luis Aguilar in calling for a review of US financial market structure. (12/9/2013) Summary. See also Piwowar speech.
Division of Corporation Finance guidance. The SEC’s Division of Corporation Finance added new Compliance and Disclosure Interpretations regarding Securities Act Rule 506, the regulations governing who may participate in certain securities offerings. The new material can be found at Questions 260.14 through Question 260.27. (12/4/2013) Compliance and Disclosure Interpretations.
Credit rating agency conflicts of interest. The SEC published a report on the independence of credit rating agencies and their management of conflicts of interests. (11/21/2013) Report.
FCPA enforcement developments. The SEC’s Co-Director of the Division of Enforcement, Andrew Ceresney, summarized the latest developments in the SEC’s enforcement of the Foreign Corrupt Practices Act. During the last year, the agency recovered over US$240 million in disgorgement and penalties from FCPA cases. Ceresney also emphasized his Division’s intention to bring FCPA cases against individuals. (11/19/2013) Ceresney speech.