Ka-Ching.  The SEC scored its "First-Ever Deferred Prosecution Agreement"  in a deal with publicly-traded Tenaris S.A. of Luxembourg.  According to the SEC, this global manufacturer of steel pipe products self-reported an FCPA violation to the SEC - the first company to enter into a DPA with the SEC - an approach initiated last year to encourage individuals and companies to provide information about misconduct and assist with an SEC investigation. 

[See our related WWW story, posted 5/17:   "First-Ever Deferred Prosecution Agreement"] 

But no matter how many times we read and reread the Agreement and the SEC Press Release, we still are having a difficult time figuring out how Tenaris came out even in the deal.  Under terms of the DPA, the firm paid $5.4 million in disgorgement and prejudgment interest.  Tenaris also agreed to pay a $3.5 million criminal penalty in an agreement with the Justice Department.  In exchange for entering into the DPA, the SEC, among other things, will refrain from prosecuting the company in a civil action for its violations if Tenaris complies with certain undertakings.  Here's how the pertinent part of the Agreement reads:

COMPLIANCE WITH AGREEMENT

16.  Subject to the full, truthful, and continuing cooperation ofthe Respondent, as described in Paragraphs 3 and 4, and compliance by Respondent with all obligations, prohibitions and undertakings in the Agreement during the Deferred Period, the Commission agrees not to bring any enforcement action or proceeding against the Respondent arising from the Investigation, after the conclusion of the Deferred Period.

17.  The Respondent understands and agrees that this Agreement does not bind other U.S. federal, state or [SRO's], but the Commission may, at its discretion, issue a letter to these organizations detailing the fact, manner, and extent of its cooperation during the Proceedings or Other Proceedings, upon the written request of the Respondent.

18.  The Respondent understands and agrees that if it sells, merges, or transfers all or substantially all of its business operations as they exist as ofthe date of this Agreement, whether such a sale is structured as a stock or asset sale, merger, or transfer during the Deferred Period, it shall include in any contract for sale, merger, or transfer a provision binding the purchaser or successor in interest to the obligations set forth in this Agreement.

19.  The Respondent understands and agrees that the Agreement only provides protection against enforcement actions arising from the Investigation and does not relate to any other violations or any individual or entity other than the Respondent.

After you've read through the documents, perhaps you can explain it to us.  Quite frankly, it's still hard to decipher how Tenaris benefited. especially when one considers the $8.9 million payout.  In any case, the Board of Directors signed off, so guess it's okay.   [SEC PR 11-112, 5/17/11]