Pride International, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21726 / November 4, 2010

Accounting and Auditing Enforcement Release No. 3203 / November 4, 2010

SEC v. Pride International, Inc., Civil Action No. 4:10-cv-4335 (S.D. Texas, November 4, 2010).

SEC CHARGES PRIDE INTERNATIONAL WITH VIOLATING THE FOREIGN CORRUPT PRACTICES ACT

The Securities and Exchange Commission today charged one of the world's largest offshore drilling companies with violating the Foreign Corrupt Practices Act (FCPA) by paying approximately $2 million to foreign officials in eight countries.

The SEC's complaint, filed in federal district court in Houston, alleges that from 2001 through 2006 Pride International, Inc. and its subsidiaries bribed government officials in Venezuela, India, Mexico, Kazakhstan, Nigeria, Saudi Arabia, the Republic of the Congo, and Libya. The bribery schemes allowed Pride and its subsidiaries to extend drilling contracts, obtain the release of drilling rigs and other equipment from customs officials, reduce customs duties, extend the temporary importation status of drilling rigs, lower various tax assessments, and obtain other improper benefits.

To settle the SEC's charges, Pride will pay disgorgement of $19,341,870 plus pre-judgment interest of $4,187,848. The company will pay an additional $32,625,000 to resolve related criminal proceedings announced today by the Department of Justice.

According to the SEC's complaint, from 2003 through 2005, Pride's former Venezuela country manager authorized bribes totaling approximately $384,000 to an official of Venezuela's state-owned oil company to secure extensions of three drilling contracts. In addition, the country manager authorized a bribe of approximately $30,000 to an employee of Venezuela's state-owned oil company to secure the payment of receivables.

The SEC alleges that in 2003 a French subsidiary of Pride paid three bribes totaling approximately $500,000, believing that the funds would be given to an Indian judge to influence customs litigation relating to the importation of a drilling rig. According to the complaint, a Pride employee in the U.S. had knowledge of the payments at the time they were made. 

The complaint alleges that in 2004 a former Pride vice president authorized a $10,000 bribe to a Mexican customs official in return for favorable treatment regarding customs deficiencies identified during an inspection of a supply boat.

The SEC's complaint also alleges that from 2001 through 2006 numerous improper payments made by Pride subsidiaries operating in Mexico, Kazakhstan, Nigeria, Saudi Arabia, the Republic of the Congo, and Libya were not correctly recorded in those subsidiaries' books and records. As a result, the complaint alleges that Pride failed to make and keep accurate books and records and failed to devise and maintain appropriate internal controls.

Without admitting or denying the SEC's allegations, Pride consented to the entry of a final judgment ordering disgorgement plus pre-judgment interest and permanently enjoining it from violating the anti-bribery, books and records, and internal controls provisions of the FCPA, codified as Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934. The proposed settlement is subject to court approval.

The Department of Justice charged Pride in a criminal information filed today with conspiring to violate the anti-bribery and books and records provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and violating the books and records provisions of the FCPA. The department and Pride International agreed to resolve the charges by entering into a deferred prosecution agreement. The department also filed a criminal information charging a Pride subsidiary with conspiring to violate the anti-bribery provisions of the FCPA, violating the anti-bribery provisions of the FCPA, and aiding and abetting the violation of the books and records provisions of the FCPA. Pride's subsidiary agreed to plead guilty to the charges. The agreements require the payment of a $32,625,000 criminal penalty. 

The SEC previously charged two former Pride employees¢€"Bobby Benton and Joe Summers¢€"for their roles in the scheme. The SEC filed a civil action against Benton on December 11, 2009 and the court entered final judgment on August 9, 2010. The Summers lawsuit was filed by the SEC on August 5, 2010 and final judgment was entered on August 11, 2010. Without admitting or denying the SEC's allegations, each consented to a permanent injunction prohibiting future FCPA violations. Benton and Summers also agreed to pay civil penalties of $40,000 and $25,000, respectively.

The SEC acknowledges and appreciates the assistance of the Department of Justice's Fraud Section and the Federal Bureau of Investigation.

See Also: SEC Complaint