Prosecuting Agency:
U.S. Securities and Exchange Commission
Type of Action:
SEC Federal Court Proceeding
Docket or Case Number:
96-cv-02631
Court:
District of Columbia
Name of Prosecuting Attorneys:
Paul V. Gerlach, SEC Headquarters
James A. Kidney, SEC Headquarters
Gregory S. Bruch, SEC Headquarters
Laura B. Josephs, SEC Headquarters
Gregory G. Faragasso , SEC Headquarters
US Assisting Agencies: Unknown
Foreign Enforcement Action/Investigation: Unknown
Foreign Assisting Agencies: Unknown
Origin of the Proceeding:
Unknown
Whistleblower:
Unknown
Case Status:
Resolved
Summary
Montedison S.p.A. ("Montedison") was an Italian conglomerate corporation with headquarters in Milan. The company had interests in the agro-industry, chemical, energy and engineering sectors. Montedison had American Depositary Receipts ("ADRs"), each representing ten shares of the company's common stock, listed on the New York Stock Exchange. Between the filing of the complaint and the filing of final judgment, Montedison was acquired as a wholly-owned subsidiary of Compart, S.p.A. Upon acquiring Montedison, Compart changed its name to Montedison.
From at least December 1988 through May 1993, Montedison materially misstated its financial condition and results of operations in periodic reports filed with the SEC due to the company's extensive and long-term efforts to conceal hundreds of millions of dollars of payments that among other things, were used to bribe politicians in Italy and other persons. Among the bribery schemes were the Exilar loan and the ENIMONT affair. In the first scheme, Montedison "loaned" approximately $272 million to wholly owned subsidiaries as a means of aggragating numerous bribes that had been paid over an extended period of time and disguise them as a single loan. In the second scheme, in an attempt to secure full control over a joint venture Montedison entered with the Italian state energy company, Montedison used an Italian real estate developer as an intermediary to overpay for real estate in Rome. The overpayment was then funneled as bribes to Italian politicians in order to secure an alteration in the terms of the joint venture agreement. In all, the real estate developer paid $106 million to an unnamed third party intermediary with the politicians.
On November 22, 1996, the SEC filed a four count Complaint in the District of Columbia against Montedison alleging (1) violations of Section 10(b) of the Securities Act; (2) violations of Section 13(a) of the Securities Act; and (3-4) violations of the books & records and internal controls provisions of the FCPA. On March 28, 2001, Montedison (then part of Compart) entered into a consent agreement with the SEC. Under the terms of the agreement, Montedison consented to entry of judgment without admitting or denying the allegations in the complaint and agreed to pay a civil fine of $300,000.
Protected Content
Please Log In or Sign Up for a free account to access restricted features of the Clearinghouse website, including the Advanced Search form and the full case pages.
When you sign up, you will have the option to save your search queries performed on the Advanced Search form.
