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SEC case against Noble execs survives motion to dismiss

The SEC got the green light this week from a federal judge to charge two former Noble executives with FCPA-related offenses they committed after February 2007.

Judge Keith Ellison Tuesday refused to dismiss the SEC's complaint but cut off claims that arose before early 2007 based on the FCPA's five-year statute of limitations.

In February this year, the SEC charged three executives from the Texas-based oil and gas services firm with bribing officials in Nigeria in exchange for illegal import permits for drilling rigs.

The SEC's civil complaint named former Noble CEO Mark A. Jackson and James J. Ruehlen, the head of Noble’s subsidiary in Nigeria.

Thomas F. O’Rourke, Noble's former controller and head of internal audit, was charged in a separate complaint with violating the FCPA. He agreed to settle the SEC's civil charges by paying a $35,000 civil penalty.

In his 61-page ruling Tuesday, Judge Ellison said the FCPA doesn't require the SEC to name the foreign officials allegedly bribed by the defendants.

He dismissed part of the complaint dealing with money damages but gave the SEC a chance to file an amended complaint.

Most defendants in FCPA cases brought by the SEC settle without fighting the claims. In another case, a former Siemens executive who worked in Argentina and lives in Germany is arguing that the SEC doesn't have jurisdiction over him.

According to the SEC, the defendants from Noble 'bribed customs officials to process false paperwork purporting to show the export and re-import of oil rigs, when in fact the rigs never moved.' The bribes were allegedly paid through a customs agent for Noble’s Nigerian subsidiary with Jackson and Ruehlen’s approval.

Judge Ellison said the facilitating payments exception is narrow. But when it's asserted by defendants the SEC can have the burden to prove it doesn't apply.

In 2010, Noble Corporation paid $8.1 million to settle FCPA offenses. It was one of seven oil and gas services companies caught in the industry sweep following revelations about Panalpina's practices in Nigeria and other countries. The DOJ and SEC said Noble paid $74,000 to a Nigerian freight forwarding agent, knowing that some of the payments would be passed on as bribes to Nigerian customs officials. Noble falsely recorded the bribes as legitimate business expenses.

The company paid a criminal penalty of $2.6 million and entered into a non-prosecution agreement with the DOJ. In its SEC settlement, Noble paid $5.5 million in disgorgement of profits and prejudgment interest.


Download the civil complaint in SEC v. Mark A. Jackson and James J. Ruehlen here.

Download the civil complaint in SEC v. Thomas F. O’Rourke here.

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