Key Energy Services, Inc., a Maryland corporation headquartered in Houston, TX, was a rig-based well services company whose common stock was registered with the SEC and traded on the New York Stock Exchange. Key Mexico, which was formed by Key Energy specifically to service wells owned by Petroleos Mexicanos ("PEMEX"), was composed of two wholly-owned indirect subsidiaries of Key Energy, Key Energy Services de Mexico S. de R.L. de C.V. and Recursos Omega S. de R.L. de C.V.
In 2008, Key Mexico was awarded a PEMEX contract to service some of its wells with a two-year term. In 2010, Key Mexico hired a Consulting Firm to help with the PEMEX contracts. Specifically, the Consulting Firm aided Key Mexico's efforts to extend and amend the original contract with PEMEX. Key Mexico's country manager knew at the time of a connection between the Consulting Firm and the official at PEMEX involved in the contract with Key Mexico, and, in fact, payments made to the Consulting Firm were intended to be funneled to that PEMEX official. From 2010 to 2013, Key Mexico paid the Consulting Firm $229,000 for consulting services. No record exists that the consulting services were ever actually provided. In addition, in 2012, Key Energy approved Key Mexico's contribution of $118,000 in gifts for PEMEX's Christmas raffle, but unbeknownst to Key Energy, Key Mexico employees intended to give $55,000 worth of those gifts directly to 130 different PEMEX officials.
On August 11, 2016, the SEC brought a settled administrative action against Key Energy alleging violations of the books & records and internal controls provisions of the FCPA. Under the terms of action, the SEC ordered Key Energy to cease and desist violations of the FCPA and ordered the company to pay disgorgement of $5 million. In determining not to impose a civil penalty in addition to disgorgement, the Commission considered Key Energy’s current financial condition and its ability to maintain necessary cash reserves to fund its operations and meet its liabilities, and also noted the company's cooperation and voluntary remedial measures.
The DOJ also investigated Key Energy. According to a company 8-K filing on April, 28 2016, the DOJ has closed its investigation and has declined to prosecute the company.