The Securities and Exchange Commission today announced that Tenaris, a Luxembourg-based global manufacturer, and supplier of steel pipe products, will pay more than $78 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) in connection with a bribery scheme involving its Brazilian subsidiary.
According to the SEC’s order, the resolution with Tenaris is the result of an alleged bribe scheme involving agents and employees of its Brazilian subsidiary to obtain and retain business from the Brazilian state-owned entity Petrobras. Specifically, the Order finds that between 2008 and 2013, approximately $10.4 million in bribes was paid to a Brazilian government official in connection with the bidding process at Petrobras. The bribes were funded on behalf of Tenaris’ Brazilian subsidiary by companies affiliated with Tenaris’ controlling shareholder.
“Tenaris failed for many years to implement sufficient internal accounting controls throughout its business operations despite known corruptions risks,” said Charles Cain, Chief of the SEC Enforcement Division’s FCPA Unit. “This failure created the environment in which bribes were facilitated through a constellation of companies associated with its controlling shareholder.”
This is not the first time Tenaris has been involved in a corruption scheme. In 2011, the company entered into a Non-Prosecution Agreement with the Department of Justice and a Deferred Prosecution Agreement with the SEC as a result of alleged bribes the company paid to obtain business from a state-owned entity in Uzbekistan.
Tenaris consented to the SEC’s order without admitting or denying the findings that it violated the anti-bribery, books and records, and internal accounting controls provisions of the Securities Exchange Act of 1934 and agreed to pay more than $78 million in combined disgorgement, prejudgment interest, and civil penalties. The company also agreed to comply with undertakings for a two-year period related to its ongoing remedial efforts.
JEFFREY A NEWMAN, A FORMER PROSECUTOR IS A WHISTLEBLOWER LAWYER WITH THE FIRM NEWMAN & SHAPIRO AND HANDLES LARGE SEC WHISTLEBLOWER CASES AND FALSE CLAIMS ACT CASES. HE CAN BE REACHED AT 978-880-4758 OR AT JNEWMAN@NEWMANSHAPIRO.COM