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Key Energy Settles FCPA Charges for $5 million

August 12, 2016 Mark Curriden

© 2016 The Texas Lawbook.

By Mark Curriden

(Aug. 12) – Houston-based Key Energy Services is paying $5 million to resolve allegations that the oil company violated the U.S. Foreign Corrupt Practices Act, the U.S. Securities and Exchange Commission announced Friday.

The SEC’s Fort Worth Regional Office charged Key Energy and its Mexico operations with making illegal payments to a contract employee at Petróleos Mexicanos, Mexico’s state-owned oil company, to help Key officials obtain insider information in order to negotiate lucrative contracts with Pemex.

Key officials agreed to pay $5 million in disgorgement and agreed to a cease-and-desist order. The settlement agreement, however, does not require Key officials to admit that the company violated the internal controls and books-and-records provisions of the FCPA.

In a written statement, the SEC states that it “found that Key Mexico made payments to the Pemex employee to induce him to provide advice, assistance and inside information that was used by Key Energy and Key Mexico in negotiating contracts with Pemex.

Key Mexico paid the Pemex employee about $229,000 between 2010 and 2013 “through an entity that provided purported consulting services to Key Mexico, even though Key Energy had not authorized the relationship with the consulting firm and lacked supporting documentation regarding the purported consulting work performed,” the SEC states.

“The hiring of the consulting firm was arranged and approved by Key Mexico’s then-country manager, who did not disclose to Key Energy the connection between the consulting firm and the Pemex employee,” the federal agency claims.

The SEC alleges that Key Mexico “improperly recorded the transfers to the consulting firm as legitimate business expenses in Key Mexico’s books and records,” which were later consolidated into Key Energy’s books and records.

Key Energy in Houston uncovered the consulting firm’s relationship to the Pemex employee in 2014, when Key Energy began an investigation into other allegations concerning the country manager, the SEC states.

The SEC pointed to Key Energy officials cooperation in its investigation in agreeing to the settlement.

“In addition, in determining the disgorgement amount and not to impose a penalty, the SEC considered Key Energy’s current financial condition and its ability to maintain necessary cash reserves to fund its operations and meet its liabilities,” the SEC reports.

The SEC’s investigation was conducted by Akita Adkins and Laura Bennett of the SEC’s FCPA Unit and Fort Worth Regional Office, and supervised by Kara N. Brockmeyer and Jonathan P. Scott.

© 2016 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

Mark Curriden

Mark Curriden is a lawyer/journalist and founder of The Texas Lawbook. In addition, he is a contributing legal correspondent for The Dallas Morning News.

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©2025 The Texas Lawbook.

Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.

If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.

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