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Univ. of Toledo College of Law

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Thursday, August 5, 2010

SEC Charges Former Business Director at Innospec with FCPA Violations

The SEC charged a former business director at Innospec, Inc., and the company's third-party agent in Iraq with violating the Foreign Corrupt Practices Act (FCPA) by engaging in widespread bribery of Iraqi government officials to land contracts under the United Nations Oil-for-Food Program and continue selling a fuel additive to Iraq after the program ended. Bribes also were paid to Indonesian officials to enable Innospec to sell the fuel additive to Indonesian state-owned oil companies.

The SEC, which charged Innospec earlier this year, alleges that David P. Turner was among senior Innospec officials who directed and approved more than $9.2 million in bribery payments either paid or promised to officials in Iraq or Indonesia. Bribes to Iraqi officials were arranged by Innospec's agent in Iraq, Ousama M. Naaman, whose commission payments included kickbacks to the Iraqi government in return for the Oil-for-Food contracts.

Both Turner and Naaman agreed to settle the SEC's charges against them.  Turner agreed to disgorge $40,000 to settle the SEC's charges against him. Despite facing significant financial penalties, none were sought against him based on, among other things, his extensive and ongoing cooperation in the investigation. Naaman agreed to disgorge $810,076 plus prejudgment interest of $67,030, and pay a penalty of $438,038 that will be deemed satisfied by a criminal order requiring him to pay a criminal fine that is at least equal to the civil penalty amount. Naaman cooperated in the investigation after his extradition to the United States.

http://lawprofessors.typepad.com/securities/2010/08/sec-charges-former-business-director-at-innospec-with-fcpa-violations.html

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