The U.S. Securities and Exchange Commission today entered into its first-ever deferred prosecution agreement, signaling a new willingness to facilitate and reward cooperation in agency investigations.
The SEC's agreement with Tenaris S.A. stems from allegations that the steel pipe maker bribed Uzbekistan government officials when bidding for a contract to supply oil and natural gas pipelines. The company made about $5 million in profits on the deal, and will pay $5.4 million in disgorgement. Tenaris also agreed to pay a $3.5 million criminal penalty in a non-prosecution agreement announced today by the Justice Department.
Last year, the SEC unveiled new initiatives to reward cooperation, including the use of deferred prosecution agreements.
According to the SEC, when Tenaris conducted an internal review of its operations and controls, it discovered violations of the Foreign Corrupt Practices Act by personnel in Uzbekistan and informed the SEC.
“The Tenaris foreign bribery scheme was unacceptable and unlawful, but the company’s response demonstrated high levels of corporate accountability and cooperation,” said Robert Khuzami, director of the SEC’s Division of Enforcement in a news release. “The company’s immediate self-reporting, thorough internal investigation, full cooperation with SEC staff, enhanced anti-corruption procedures, and enhanced training made it an appropriate candidate for the Enforcement Division’s first deferred prosecution agreement.”
Tenaris was represented by Sullivan & Cromwell partner Robert Guiffrra.