Skadden Successfully Settles FCPA Enforcement Action

Skadden successfully represented Firm client NATCO Group Inc., an oil services provider, in the first FCPA enforcement action settled in 2010 by the U.S. Securities and Exchange Commission. The SEC's complaint alleged that NATCO subsidiary TEST Automation & Controls, Inc., created and accepted false documentation to disguise cash payments made to immigration officials in Kazakhstan, that NATCO's internal control system failed to ensure that TEST properly recorded these payments, and that NATCO failed to accurately record these payments in its consolidated books and records. As part of its defense, Skadden conducted an internal investigation of TEST's worldwide operations, and assisted the Company in its remediation efforts. The settlement, reached in January 2010, included a civil penalty of $65,000, one of the lowest amounts in recent FCPA enforcement history, and was reached without NATCO admitting or denying the SEC's allegations.

In a related administrative proceeding with the SEC, NATCO agreed to the issuance of an order requiring it to cease and desist from future violations of the FCPA. After a lengthy series of negotiations, the DOJ declined to prosecute NATCO.