In the Matter of Oil States, International, Inc.

Hydraulic Well Control (HWC), a subsidiary of Oil States, International, Inc. (defendant), hired a Venezuelan consultant to deal with a Venezuelan state oil company without vetting him or training him on the Foreign Corrupt Practices Act (the Act). The consultant and employees of the Venezuelan company secretly overbilled HWC and took kickbacks, and HWC's bookkeepers, unaware of the scheme, recorded the resulting payments as ordinary business expenses that flowed into Oil States's books. The SEC brought cease-and-desist proceedings against Oil States for violating the Act's accounting provisions.

Whether, under the Foreign Corrupt Practices Act, public companies must keep books, records, and accounts that accurately and fairly reflect the transactions and dispositions of the assets of the issuer.