A former Innospec chief executive has resolved regulator's charges that he authorized the company to pay bribes to officials overseas.
Charges against Innospec, a global specialty chemical company continues to unravel as a new lawsuit filed by the federal regulator indicts its former chief executive officer for engaging in a bribery scheme involving foreign officials, which breaches the Foreign Corrupt Practices Act.
The SEC said that the company’s former CEO, Paul Jennings agreed to pay more than $229,000 in penalties to settle charges that he played a ‘key role’ in bribing Iraqi and Indonesian officials to win over contracts for the firms specialty chemicals. Jennings neither admitted nor denied the allegations, but agreed to refrain from future violations of securities law.
According to the SEC complaint, since mid- late 2004 while Jennings served as the Delaware-based company’s CFO, he ‘actively participated in bribery schemes,’ in Iraq and Indonesia. Then in 2000 to 2008, Innospec paid more than $6 million in bribes to obtain and retain sales of tetraethyl lead (a fuel additive used in aviation) – a transaction worth $176 million in revenue.
Jay Holtmeier, a lawyer representing Jennings, did not immediately return a call seeking comment.
Additionally, the commission alleges that from 2004 to 2009, Jennings approved annual certifications given to auditors containing fraudulent financial statements, books and internal controls of the firm. Moreover, the SEC claims that the former CEO falsely stated that he was in compliance with the company’s Code of Ethics, which incorporates its FCPA policy.
‘This is the third enforcement action against an individual responsible for the widespread bribery that occurred at Innospec,’ says Cheryl Scarboro, chief of the SEC's Foreign Corrupt Practices Act Unit. ‘We will vigorously hold accountable those individuals who approve such bribery and who sign false SOX certifications and other documents to cover up the wrongdoing.’
Jennings will disgorge $116,092 plus prejudgment interest of $12,945 and pay a civil penalty of $100,000. In March last year, Innospec reached a $40.2 million global settlement of more than a dozen criminal charges in the US and UK.
