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SEC Charges Ex-Pride VP

The Securities and Exchange Commission accused Bobby Benton, a former vice president of offshore drill rig operator Pride International, of violating the Foreign Corrupt Practices Act. He allegedly bribed Mexican officials in 2004 and altered the company’s accounts to hide the payments. The SEC’s December 10 civil complaint (below) was filed in federal court in Houston.

The SEC accused Benton of authorizing a third party to pay off Mexican customs officials and concealing bribes to Mexican and Venezuelan officials between 2003 and 2005. Benton allegedly deleted references in the audits to about $384,000 in payments made by “the manager of the Venezuelan branch of a French subsidiary of Pride” to third-party companies. The SEC said the alleged bribes went to a Venezuelan state-owned oil company official to extend three drilling contracts.

Pride disclosed in SEC filings including its latest quarterly report (here) an internal investigation into the company’s Latin America operations that began in February 2006. It said possible FCPA violations were found, including payments of less than $1 million to government officials in Venezuela and Mexico. 

Benton is accused of authorizing a $10,000 bribe in 2004 to ensure a Mexican customs official would overlook deficiencies in a Pride supply boat. He’s also accused of redacting references to another $15,000 bribe paid by an agent of Pride’s Mexican subsidiary to keep a Mexican customs official from delaying a drilling rig for customs violations, according to the complaint.

The SEC is seeking a civil penalty and disgorgement from Benton, as well as an injunction against future violations.

Pride’s internal investigation also found evidence of illegal payments of less than $2.5 million from 2001 through 2006 directly or indirectly to government officials in Saudi Arabia, Kazakhstan, Brazil, India, Nigeria, Libya, Angola and the Republic of the Congo. The payments related to clearing rigs and equipment through customs, resolving customs disputes, immigration, tax, licensing and merchant marine issues. 

The company self-disclosed the results of its investigation. It said it is in talks with the DOJ and SEC “regarding a potential negotiated resolution of these matters, which could be settled during 2009 and which . . . could involve a significant payment by us.” It said a settlement is likely to “include both criminal and civil sanctions.” The DOJ hasn’t yet announced any enforcement actions involving Benton or the company.

View the Securities and Exchange Commission’s December 14, 2009 Litigation Release No. 21335 in SEC v. Bobby Benton here.

Download the civil complaint in SEC v. Bobby Benton, Civil Action No. 4:09-CV-03963 (S.D. Texas, December 11, 2009) here.

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