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Enforcement Action Dataset

 

Initiation Date:    11/19/2018  Information

Prosecuting Agency:    US Securities and Exchange Commission

Name of Prosecuting Attorneys:   

  • David B. Reece, SEC Fort Worth Regional Office
  • Samantha Martin, SEC Fort Worth Regional Office
  • Laura Bennett, SEC Fort Worth Regional Office

Assisting Agencies:    U.S. Department of Justice , Federal Bureau of Investigation , Brazilian Federal Prosecution Office (Ministerio Publico Federal)

Type of Action:    SEC Administrative Proceeding

Origin of the Proceeding:    Voluntary disclosure

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Vantage Drilling Company (“VDC”) was a Cayman Islands corporation headquartered in Houston, Texas. Prior to the initiation of liquidation proceedings in December 2015, VDC's common stock was registered with the SEC and traded on the New York Stock Exchange Market.

Vantage Drilling International (“Vantage”) was an offshore drilling company headquartered in Houston, Texas and organized under the laws of the Cayman Islands. Until February 2016, Vantage was a subsidiary of VDC. It now owns and controls all of the tangible assets and operations of VDC and is VDC's successor in interest.

Petroleo Brasileiro SA ("Petrobras") was Brazil's state-owned oil and gas company.

According to the allegations in the enforcement action, between approximately 2008 and 2012, a direction on VDC's board, who was also the company's largest shareholder, entered into a series of agreements with an official at Petrobras' International Division ("PID") to pay bribes to that official in exchange for PID to grant VDC a contract to deliver a new ultra-deepwater drillship. The bribes were paid from the VDC director's personal funds and were made through a Brazilian agent that had contracted with VDC and an intermediary associated with the official. The agreements required the VDC director to make payments in three installments: (1) $6,200,000 when PID signed the drilling services contract with VDC; (2) $4,650,000 six months after the contract was signed and (3) $4,650,000 when the drillship began working for PID. In total, Director A agreed to pay $31 million from his personal funds, though it's unclear from the charging documents whether all the payments were completed. On February 4, 2009, Petrobras and VDC signed the drillship contract for an eight-year term and with an approximate value of $1.8 billion.

In an administrative proceeding initiated on November 19, 2018, the SEC ordered Vantage to cease and desist violations of the internal controls provisions of the FCPA and to pay disgorgement of $5 million. In determining the amount of disgorgement and the lack of a civil fine, the SEC considered Vantage's voluntary disclosure, cooperation, remedial efforts, and the company's then current financial condition.

Country(ies) involved:    Brazil

Region(s) involved:    Latin America

Sanction to Bribe Ratio:    $5,000,000 / $31,000,000 = 16.13 %

Sanction to Revenue Ratio:    $5,000,000 / $1,800,000,000 = 0.28 %

Sanction to Profit Ratio:    Not Applicable

FCPA Matter Name:   Vantage Drilling's Involvement in Brazil Information

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

Country(ies) involved:    Brazil

Region(s) involved:    Latin America

Total $ Bribery Payments:    $31,000,000

Total $ Revenue Generated from Bribery:    $1,800,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    Unknown

Total $ Monetary Sanctions (U.S. Sanctions Only):    $5,000,000

Sanction to Bribe Ratio:    $5,000,000 / $31,000,000 = (16.13 %)

Sanction to Revenue Ratio:    $5,000,000 / $1,800,000,000 = (0.28 %)

Sanction to Profit Ratio:    Not Applicable

Name:    Vantage Drilling International

Entity Type:    Private Company

Place of Incorporation:    Cayman Islands

HQ Country(ies):    United States

Industry:    Oil & Gas

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

Related Claims:    None

Statutory Basis for FCPA Jurisdiction:    Issuer

Name:    Vantage Drilling Company

Entity Type:    Public Company

Place of Incorporation:    Cayman Islands

HQ Country:    United States

Industry:    Oil & Gas

Period of Bribery:   2008 - 2012

Total Bribery Payments:    $31,000,000

Total Revenue Generated from Bribery:    $1,800,000,000

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Brazil

Region(s) involved:    Latin America

Officials Potentially Influenced (Name; Title; Organization): 

  • Name Unknown, Official; Petrobras International Division
  • Name Unknown, Politicians; Brazilian government

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third-Party Intermediary:   

  • Brazilian agent , Agent/Consultant/Broker
  • Petrobras intermediary , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Not Available

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments to Petrobras

Period of Bribery:   2008 – 2012

Total Bribery Payments:    $31,000,000

Total Revenue Generated from Bribery:    $1,800,000,000

Total Profit Earned or Expenses Avoided from Bribery:    Unknown

Country(ies) involved:    Brazil

Region(s) involved:    Latin America

Officials Potentially Influenced (Name; Title; Organization):  

  • Name Unknown, Official; Petrobras International Division;
  • Name Unknown, Politicians; Brazilian government;

Affiliates, Subsidiaries and Joint Ventures Involved in the Misconduct:    None/Unknown

Third Party Intermediary:    Brazilian agent - Agent/Consultant/Broker
Petrobras intermediary - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    Not Available

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     Yes

Type of Transaction:    Spin-off


Predecessor:  Vantage Drilling Company

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    Yes
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    No/Unknown
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No/Unknown
  • Quality of Due Diligence:    Unknown
  • Voluntary Disclosure by Successor in Connection with the Transaction:    Yes
  • DOJ Opinion Sought in Connection with Transaction:    No/Unknown
  • Successor Liable for Predecessor Misconduct? :    Yes

Successor:    Vantage Drilling International

  

Re: Vantage Drilling International

  • Inadequate internal controls or auditing

Mitigating Factors Referenced by the Government (Company Defendants):

Defendant Self-Report Cooperation Voluntary Remedial Measures Misconduct Limited to Low Level Individuals Other factors
Vantage Drilling International  

Aggravating Factors Referenced by the Government (Company Defendants):

Defendant Insufficient Cooperation Insufficient Remedial Measures
Vantage Drilling International    

Total Monetary Sanctions for the Action:    $5,000,000

Case Status:    Resolved


Disposition:    Cease and Desist Order

Date of Disposition:    11/19/2018

Vantage Drilling International

—  Total Monetary Sanctions for Defendant:    $5,000,000

—  Compliance Obligation:    No

—  Reporting Obligation:    N/A

—  Admission of Guilt/Acceptance of Responsibility:    No

No Document Title Date Category