US Investigating Hercules On Foreign Corrupt Practices Allegations
April 07 2011 - 6:26PM
Dow Jones News
Contract driller Hercules Offshore Inc. (HERO) said Thursday
that it is being investigated by the Securities Exchange Commission
and the Department of Justice for potential violations of the
Foreign Corrupt Practices Act.
In a securities filing Hercules said the Securities Exchange
Commission on Monday subpoenaed documents related to possible
violations of the Foreign Corrupt Practices Act and that the
Justice Department notified the company on Tuesday that it was also
investigating the company's operations.
The U.S. government has markedly stepped up enforcement of the
Foreign Corrupt Practices Act in recent years with criminal charges
against executives as well as steep fines. The act bans companies
that trade on U.S. exchanges from bribing foreign officials to gain
a business advantage.
Houston-based Hercules, the largest shallow-water driller in the
Gulf of Mexico, has international operations in Mexico, Nigeria,
India, Malaysia and Saudi Arabia.
Company officials did not immediately respond to requests for
comment. Melinda Brunger, a Houston lawyer who represents the
company, declined to comment.
The oil and gas industry, which operates in nations that
anti-bribery groups rank as among the most corrupt in the world,
have been particularly vulnerable to FCPA violations. In November
Oil giant Royal Dutch Shell PLC (RDSA, RDSA.LN) and six other
companies, including offshore drillers Transocean Ltd. (RIG) and
Noble Corp. (NE), agreed to pay a combined $236 million to settle
allegations that they or their contractors bribed foreign officials
to smooth the way for importing equipment and materials into
several countries.
In the filing Hercules said that it intends to cooperate with
investigators but that, "At this time, it is not possible to
predict the outcome of the investigations, the expenses we will
incur associated with these matters, or the impact on the price of
our common stock or other securities if the SEC or (Department of
Justice) takes any actions regarding these investigations."
-By Ryan Dezember, Dow Jones Newswires; 713-547-9208;
ryan.dezember@dowjones.com