Petrobras Reaches Settlement With SEC for Misleading Investors

The Securities and Exchange Commission today charged Brazilian oil-and-gas company Petróleo Brasileiro S.A. with misleading U.S. investors by filing false financial statements that concealed a massive bribery and bid-rigging scheme at the company. The U.S. Department of Justice also announced today a non-prosecution agreement with Petrobras. The SEC’s order finds that senior Petrobras executives worked with Petrobras’s largest contractors and suppliers to inflate the cost of Petrobras’s infrastructure projects by billions of dollars. The companies executing those projects paid billions in kickbacks to the Petrobras executives, who shared the illegal payments with Brazilian politicians who helped them obtain their high-level positions at Petrobras. Petrobras erroneously recorded these payments as money spent to acquire and improve assets, resulting in an estimated $2.5 billion overstatement of assets. The SEC’s order finds that Petrobras’s false and misleading filings included materially false and misleading statements to U.S.