Innospec Inc. (Innospec) is a Delaware corporation with its principal executive offices in the United States and Ellesmere Port, United Kingdom. Innospec manufactures, distributes and markets fuel and specialty chemicals to oil refineries and other chemical and industrial companies throughout the world. Innospec's common stock is registered with the Commission under Section 12(b) of the Exchange Act and since March 21, 2006, it has traded on the NASDAQ under the symbol "IOSP."
According to its SEC filings, on February 7, 2006, Innospec was notified by the SEC that the agency had commenced an investigation to determine whether any violations of law had occurred in connection with certain transactions conducted by or involving Innospec, including those conducted by its wholly owned indirect Swiss subsidiary, Alcor Chemie Vertriebs GmbH (Alcor) under the United Nations Oil-for-Food Program (OFFP) between June 1, 1999 and December 31, 2003. As part of its investigation, the SEC issued a subpoena requiring the production of certain documents, including documents relating to these transactions, by Innospec and Alcor. Upon receipt of the SEC’s notification and initial subpoena, Innospec undertook a review of its participation in the OFFP.
On October 10, 2007 and November 1, 2007, the SEC served two additional subpoenas on Innospec. These additional subpoenas required the production of documents relating both to the OFFP, and also to transactions conducted by Innospec or its subsidiaries with state owned or state controlled entities between June 1, 1999 and the date of the subpoenas, concerning the use of foreign agents and the possibility of extra-contractual payments to secure business with foreign governmental entities in the context of the FCPA and other laws. In a coordinated investigation, Innospec was also notified by the DOJ regarding the possibility of violations by the company or its subsidiaries arising under other laws stemming from matters covered by the SEC investigation. The subjects into which the SEC and DOJ inquired included areas that concern certain former and current executives.
On February 19, 2008, the Board of Directors of Innospec formed a committee comprised of the chairmen of the Board, the Audit Committee and the Nominating and Governance Committee, all of whom were independent directors. External counsel to Innospec, reporting to the committee, conducted an investigation into the circumstances giving rise to the SEC and DOJ investigations.
On March 5, 2008, a letter was received by Innospec from the DOJ in which a request for a wider and more detailed range of documents was made. A further letter was received from the DOJ on June 13, 2009, which contained requests for information made by the U.S. Office of Foreign Assets Control (“OFAC”).
On July 31, 2009, the DOJ issued a press release in which it disclosed the arrest of an individual and the unsealing of an August 7, 2008 indictment in the U.S. District Court for the District of Columbia against the individual for certain FCPA violations relating to his alleged participation in an eight-year conspiracy to defraud the OFFP and to bribe Iraqi government officials on behalf of a publicly traded U.S. chemical company in connection with the sale of a chemical additive used in the refining of leaded fuel. This individual was Innospec’s former agent for Iraq and certain other markets and Innospec understood the indictment to relate to the matters that were the subject of the OFFP and related FCPA investigations.
Separately, on May 21, 2008, the United Kingdom’s Serious Fraud Office (SFO) notified Innospec Limited (IL), a wholly owned subsidiary of Innospec, that the agency had commenced an investigation into certain contracts involving British companies under the OFFP. As part of this investigation, the SFO has asked Innospec to produce documents in respect of the company’s participation in the OFFP between January 1, 1996 and December 31, 2003. Following receipt of the SFO’s notice, Innospec instructed external legal counsel to advise and assist in relation to the investigation.
On October 16, 2008, Innospec was further notified that the scope of the SFO’s investigation would extend to matters relating to potential bribery involving overseas commercial agents that were already the subject of the ongoing DOJ and SEC investigations. The investigation by the SFO similarly included areas that concern certain former and current executives of Innospec.
Innospec cooperated with all investigations.
As disclosed in its March 22, 2010 8-K filing, On March 18, 2010, Innospec reached settlement with the DOJ and SEC regarding the OFFP investigation.
