MTS Receives DOJ and SEC Declination Letters Concluding FCPA Investigations
On August 7, 2017, MTS Systems (MTS), a Minnesotabased maker of test systems and industrial position sensors, announced that both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) had issued declination letters ending the U.S. government's investigation of potential violations of the Foreign Corrupt Practices Act (FCPA).
In 2012, MTS first disclosed that it was conducting an internal investigation into certain gift, travel, entertainment and other expenses incurred in the AsiaPacific region. In 2013, the company provided the results of its investigation to the DOJ and SEC, voluntarily disclosing the investigation to them.
MTS's Form 10Q is available here. For more information, see The Wall Street Journal's coverage here and the FCPA Blog's coverage here.
Halliburton Company Agrees to Pay More than $29 Million to Resolve SEC FCPA Enforcement Action
On July 27, 2017, Halliburton Company, a global oilfield services company headquartered in Houston, Texas, submitted an Offer of Settlement to the SEC, resulting in an administrative CeaseandDesist Order resolving the government's investigation of alleged violations of the FCPA.
Specifically, the SEC's enforcement action alleges that, from April 2010 through April 2011, Halliburton paid
$3,705,000 to a local Angolan company owned by a former Halliburton official who was the neighbor of an official at Angola's stateowned oil company, Sonangol, with authority to veto or reduce subcontracts awarded to Halliburton by large international oil companies. Halliburton, the SEC alleges, entered into contracts with the local company for the purpose of satisfying local content requirements, but did so in violation of its own internal accounting controls and did not record the true nature of the transactions in its books and records.
Halliburton agreed to disgorge illgotten gains of $14 million along with prejudgment interest of $1.2 million, and pay a civil penalty of $14 million. Halliburton also agreed to retain an independent consultant to review and evaluate Halliburton's anticorruption policies and procedures, including policies and procedures related to retaining local content.
The SEC also reached an agreement with former Halliburton vice president Jeannott Lorenz, a citizen of France and a permanent resident of the United States, in which Lorenz agreed to pay a $75,000 civil penalty to the SEC because, the SEC alleges, Lorenz approved the payments to the local company knowing that doing so would circumvent Halliburton's internal accounting controls and that the true nature of the transaction would not be properly recorded.
The SEC's Press Release and Cease-and-Desist Order are available here. For more information, see The Wall Street Journal's coverage here, Law360's coverage here, and the FCPA Blog's coverage here.
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