SEC Charges Eni S.p.A. with FCPA Violations
April 17, 2020
File No. 3-19751
April 17, 2020 - The Securities and Exchange Commission today announced that Eni S.p.A., an Italian multinational oil and gas company whose ADRs are listed on the New York Stock Exchange, agreed to settle charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) in connection with an improper payment scheme in Algeria by Eni's 43% minority-owned and controlled subsidiary at the time, Saipem S.p.A. Eni is a recidivist, having been previously charged by the SEC in 2010 for violating the same FCPA provisions in connection with a bribery scheme in Nigeria by its then-wholly-owned subsidiary Snamprogetti Netherlands, B.V.
According to the SEC's order, Saipem entered into four sham contracts with an intermediary between 2007 and 2010 to assist in obtaining contracts awarded by Algeria's state-owned oil company. The order finds that Saipem paid approximately €198 million to the intermediary, which directed a portion of the money to Algerian government officials or their designees. The order finds that Sapiem was awarded at least seven contracts from the Algerian state-owned oil company. According to the order, Eni, which at the time consolidated Saipem's financial statements into its own, failed to accurately record the true nature of the intermediary payments in its books and records. The order also finds that a former senior executive at Saipem orchestrated the scheme at Saipem and, after he was hired to be the CFO of Eni, continued to facilitate Saipem's improper payments to the intermediary. As a result of the former executive's misconduct at Eni, the company failed to satisfy its good faith obligations to use its influence to cause Saipem to devise and maintain a system of internal accounting controls consistent with statutory requirements.
Without admitting or denying the SEC's findings, Eni has consented to the entry of an order to cease and desist from violating the books and records and internal accounting controls provisions of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and has agreed to pay $24.5 million in disgorgement and prejudgment interest.
The SEC's investigation was conducted by Delane Olson and Michael Brennan and supervised by Ansu N. Banerjee, Assistant Regional Director, and Melissa R. Hodgman, Associate Director. The SEC acknowledges the assistance of the U.S. Department of Justice, Fraud Section; the Federal Bureau of Investigation; the Milan Public Prosecutor's Office; and the Italian Commissione Nazionale Per Le Societa E La Borsa (CONSOB).