Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Tenaris Gets First-Ever SEC Deferred Prosecution Agreement

In an FCPA settlement announced today, Luxembourg-based pipe maker Tenaris became the first company to enter into a deferred prosecution agreement with the Securities and Exchange Commission in any kind of enforcement action.

The Justice Department has long used deferred prosecution agreements to settle criminal enforcement actions, and it usually leads FCPA investigations of public companies. But with Tenaris, the SEC apparently took the lead on both the investigation and the enforcement.

Under the SEC’s settlement, the company will pay $5.4 million in disgorgement and prejudgment interest.

Tenaris also agreed today to resolve FCPA charges with the DOJ by paying a $3.5 million criminal penalty. It entered into a non-prosecution.

The SEC alleged Tenaris bribed Uzbekistan government officials while bidding to supply pipelines for transporting oil and natural gas. Tenaris made almost $5 million in profits from contracts it won through the bribery, the agency said.

The DOJ and SEC said Tenaris’ cooperation resulted in reduced penalties. The company conducted an internal investigation and “provided thorough, real-time cooperation,” the DOJ said. 

The SEC’s use of a deferred prosecution agreement for the first time marks a shift to more aggressive enforcement by the agency. It’s adopting practices like those used by the Justice Department’s criminal division. Robert Khuzami, director of the SEC’s division of enforcement, spent 11 years at the U.S. Attorney’s Office for the Southern District of New York, where he headed the white-collar crime unit.

Khuzami announced last year that the SEC would begin using deferred prosecution agreements and similar tactics to encourage greater cooperation from individuals and companies. “This is a potential game-changer for the division of enforcement,” he said. “There is no substitute for the insiders’ view into fraud and misconduct that only cooperating witnesses can provide.”

Tenaris’ two-year deferred prosecution agreement requires it to review and update its code of conduct beginning in February next year. Directors, officers, and management-level employees have to certify compliance with the code of conduct starting now. And the company has to provide “effective training” to most management employees and related staff.

Tenaris S.A.’s ADRs trade on the NYSE under the symbol TS.

View the SEC’s release dated May 17, 2011 here.

Download Tenaris’ deferred prosecution agreement with the SEC here.

Download the DOJ’s May 17, 2011 release here.

Share this post


Comments are closed for this article!