The SEC yesterday filed a settled enforcement action against Paul W. Jennings, a former CFO and CEO at Innospec, Inc.
The SEC's civil complaint charged him with falsely certifying to auditors from 2004 through 2009 that he had complied with Innospec's Foreign Corrupt Practices Act compliance policy. The SEC said he also "signed annual and quarterly personal certifications pursuant to the Sarbanes-Oxley Act of 2002 in which he made false certifications concerning the company's books and records and internal controls."
Jennings will disgorge $116,092 plus prejudgment interest of $12,945 and pay a civil penalty of $100,000. The SEC said the penalties take into consideration Jennings' cooperation. The SEC acknowledged help in the case from the U.S. Justice Department and the U.K.'s Serious Fraud Office. Neither of those agencies have announced charges against Jennings.
The SEC's complaint said,
Innospec . . . paid bribes to Indonesian government officials from at least 2000 through 2005 in order to win contracts worth approximately $48,571,937 from state owned oil and gas companies in Indonesia. Jennings became aware of and approved payments beginning in mid to late 2004. Various euphemisms to refer to bribery were commonly used in e-mails and in discussions with Jennings and others at Innospec, including "the Indonesian Way," "the Lead Defense Fund," and "TEL optimization." Bribery discussions were held on a flight in the U.S. and even discussed at Jennings' performance review in 2005. In one bribery scheme with Pertamina, an Indonesian state owned oil and gas company, Innospec agreed, with approval by Jennings, to a "one off payment" of $300,000 to their Indonesian Agent with the understanding that it would be passed on to an Indonesian official.
In March last year, Innospec reached a $40 million global settlement of more than a dozen criminal charges in the U.S. and U.K., including FCPA and U.N. oil for food program offenses, and violations of the U.S. embargo against Cuba.
In July 2009, Innospec's former agent in Iraq was arrested in Frankfurt, Germany. The Justice Department extradited Ousama Naaman to the United States. He pleaded guilty last June to conspiracy and to violating the Foreign Corrupt Practices Act and is scheduled to be sentenced on Wednesday. In his sentencing memorandum, Naaman noted he is the only individual so far to be criminally prosecuted for Innospec's bribery.
In its civil complaint against Jennings, the SEC said when Jennings was CEO beginning in 2005, he approved bribes to Iraqi officials of about $1.6 million.
View SEC Litigation Release No. 21822 and Accounting and Auditing Release No. 3235 (both dated January 24, 2011) in Securities & Exchange Commission v. Paul W. Jennings, 1:11-CV-00144 (D.D.C.) (RMC) here.
Download a copy of the SEC's civil complaint here.