Key Energy Services Inc. said Thursday the Justice Department informed the company that it has closed its FCPA investigation and won’t bring an enforcement action.
Houston-based Key Energy said in 2014 it was investigating allegations of possible bribery involving its Mexico operations.
The company also said Thursday it is negotiating with the SEC enforcement division to settle the agency’s investigation.
“Key has reached an agreement in principle with the staff on the terms of a proposed offer of settlement, which must be presented to the Commission for approval,” Key Energy said.
“In connection with the offer of settlement,” the company said, “Key has accrued a liability in the amount of $5 million.”
Key Energy provides onshore energy production services.
It self disclosed the bribery allegations and its investigation to the SEC and the Justice Department in May 2014.
It also said then the SEC was investigating potential FCPA violations involving its Russia business.
The company employs about 8,000 people worldwide. It has customers in the United States, Mexico, Colombia, the Middle East, and Russia.
Key Energy Services Inc. trades on the NYSE under the ticker symbol KEG.
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The FCPA disclosure in Key Energy’s Form 8-K filed with the SEC on April 28, 2016 said:
As previously disclosed, Key Energy Services, Inc. (“Key” or the “Company”) has been cooperating with investigations by the Department of Justice and the Securities and Exchange Commission into possible violations by Key of the Foreign Corrupt Practices Act (“FCPA”).
Key has been informed by the Department of Justice that the Department has closed its investigation and that it has decided to decline prosecution of the Company.
In addition, Key has been engaged in negotiations with the staff of the Division of Enforcement of the SEC in an effort to reach a resolution of the staff’s investigation related to these same matters. Key has reached an agreement in principle with the staff on the terms of a proposed offer of settlement, which must be presented to the Commission for approval. While there is no assurance that the offer of settlement will be accepted by the Commission, Key is optimistic that the proposed resolution will become final in the second quarter of 2016. In connection with the offer of settlement, Key has accrued a liability in the amount of $5 million.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.