Enforcement Action

 

Docket or Case Number:    3-18080

Court:    N/A

Initiation Date:    07/27/2017  Information

Prosecuting Agency:    US Securities and Exchange Commission

Name of Prosecuting Attorneys:    N/A

Assisting Agencies:    U.S. Department of Justice , Federal Bureau of Investigation

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Halliburton Company was an oilfield services corporation, headquartered in Houston, Texas. The company's stock was registered with the SEC and traded on the New York Stock Exchange. Halliburton previously entered into a settlement with the SEC in February 2009 in connection with a bribery scheme perpetrated by its former subsidiary KBR, Inc.

Jeannot C. Lorenz was a French citizen and permanent resident of the U.S. who, at the time of the misconduct, was a Vice-President at Halliburton and who variously served as the country manager for Angola and Brazil.

In early 2008, officials at Angola's state-owned oil company, Sonangol, informed Halliburton that Sonangol was considering vetoing further subcontract work for Halliburton in Angola because the company had insufficient local content and was thus not compliant with Angola's local content rules. In response, Halliburton tasked Lorenz with finding local content in Angola that would satisfy Sonangol. In April 2009 when a new round of contracts for Sonangol projects were coming up for bid, Lorenz proposed that Halliburton outsource approximately $15 million of services to a local Angolan company to fulfill its local content obligations. This local Angolan company was owned by a former Halliburton employee who was a friend and neighbor of the Sonangol official who had the authority to veto or reduce the Haliburton subcontracts. Because of the connection to the Sonangol official and because the contracts provided inaccurate scopes of work, the contracts violated Halliburton's internal accounting controls, and Halliburton's books and records subsequently included inaccurate information.

In an administrative proceeding on July 27, 2017, the SEC issued a settled Cease and Desist Order against Halliburton and Lorenz alleging violations of the books & records and internal controls provisions of the FCPA. Without admitting or denying the allegations within, both Halliburton and Lorenz agreed to be enjoined from future violations of the FCPA. Lorenze agreed to pay a civil fine of $75,000. Halliburton agreed to disgorge $14 million in ill-gotten profits plus $1.2 million in prejudgment interest and to pay a civil fine of $14 million. Halliburton also agreed to hire an independent compliance monitor for a term of 18 months.

Country(ies) involved:    Angola

Sanction to Bribe Ratio:    $29,275,000 / $3,705,000 = 790.15 %

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $29,275,000 / $14,000,000 = 209.11 %

Number of Related Enforcement Actions (Including This Enforcement Action):    1

Country(ies) involved:    Angola

Total $ Bribery Payments:    $3,705,000

Total $ Revenue Generated from Bribery:    N/A

Total $ Profit Earned or Expenses Avoided from Bribery:    $14,000,000

Total $ Monetary Sanctions:    $29,275,000

Sanction to Bribe Ratio:    $29,275,000 / $3,705,000 = (790.15 %)

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    $29,275,000 / $14,000,000 = (209.11 %)

Name:    Halliburton Company

Place of Incorporation:    United States

HQ Country(ies):    United States

Entity Type:    Public Company

FCPA Claims:    Books & Records, Primary, Issuer (15 U.S.C. § 78m (b)(2)(A)) ; Internal Controls, Primary, Issuer (15 U.S.C. § 78m(b)(2)(B))

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer


Name:    Jeannot C. Lorenz

Employers & Positions:    Halliburton Company - Former Vice-President

Country:    France, United States

FCPA Claims:    Books & Records, Causing (Administrative) (15 U.S.C. § 78u-3(a); 15 U.S.C. § 78m(b)(2)(A)) ; Internal Controls, Causing (Administrative) (15 U.S.C. § 78u-3(a); 15 U.S.C. § 78m(b)(2)(B)) ; Books & Records, Primary, Knowing Violation (15 U.S.C. § 78m (b)(5)) ; Internal Controls, Primary, Knowing Violation (15 U.S.C. § 78m(b)(5)) ; Books & Records, Primary, Falsification of accounting records (17 C.F.R. § 240.13b2–1)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Person (Books & Records, Internal Controls) ; Aider & Abettor/Cause/Control Person

Period of Bribery:   2010 - 2011

Total Bribery Payments:    $3,705,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $14,000,000

Country(ies) involved:    Angola

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Official; Sonangol

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Local Angolan company , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments in Angola

Period of Bribery:   2010 – 2011

Total Bribery Payments:    $3,705,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    $14,000,000

Country(ies) involved:    Angola

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Official; Sonangol;

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Local Angolan company - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    No Available

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  No


M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     No

N/A

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Halliburton Company      

Mitigating Factors Referenced by the Government (Individual Defendants):

Defendant Cooperation
Jeannot C. Lorenz  

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Halliburton Company    

Aggravating Factors Referenced by the Government (Individual Defendants):

Defendant Insufficient Cooperation
Jeannot C. Lorenz  

Total Monetary Sanctions for the Action:    $29,275,000

Case Status:    Resolved


Disposition:    Cease and Desist Order

Date of Disposition:    07/27/2017

Halliburton Company

—  Total Monetary Sanctions for Defendant:    $29,200,000

—  Compliance Obligation:    Yes

—  Reporting Obligation:    Independent monitor

—  Admission of Guilt/Acceptance of Responsibility:    No


Jeannot C. Lorenz

—  Total Monetary Sanctions for Defendant:    $75,000

—  Admission of Guilt/Acceptance of Responsibility:    No

No Document Title Date Category