November 15, 2012
BP Agrees to Pay $525 Million to Settle SEC Charges Related to Oil SpillIn addition to settling criminal charges with the DOJ, BP p.l.c. settled SEC charges related to the oil spill. The SEC charged BP with misleading investors while its Deepwater Horizon oil rig was gushing into the Gulf of Mexico by significantly understating the flow rate in multiple reports filed with the SEC. BP agreed to settle the SEC's charges by paying $525 million, the third-largest penalty in agency history. The SEC plans to establish a Fair Fund with the BP penalty to provide harmed investors with compensation for losses they sustained in the fraud.
The SEC alleges that BP made fraudulent public statements indicating a flow rate estimate of 5,000 barrels of oil per day. BP reported this figure despite its own internal data indicating that potential flow rates could be as high as 146,000 barrels of oil per day. BP executives also made numerous public statements after the filings were made in which they stood behind the flow rate estimate of 5,000 barrels of oil per day even though they had internal data indicating otherwise. In fact, they criticized other much higher estimates by third parties as scaremongering. Months later, a government task force determined the flow rate estimate was actually more than 10 times higher at 52,700 to 62,200 barrels of oil per day, yet BP never corrected or updated the misrepresentations and omissions it made in SEC filings for investors.
The proposed final judgment is subject to court approval.
TrackBack URL for this entry:
Listed below are links to weblogs that reference BP Agrees to Pay $525 Million to Settle SEC Charges Related to Oil Spill: