Securities & Exchange Commission v. Jackson
2012 U.S. Dist. LEXIS 174946
S.D. Tex.2012Background
- SEC enforces against Mark A. Jackson and James J. Ruehlen for FCPA and related securities-law violations tied to Noble/Noble-Nigeria TIPs.
- Noble-Nigeria used Temporary Import Permits (TIPs) to operate offshore rigs; extensions possible; failures to properly obtain TIPs alleged.
- Jackson (CFO/COO/CEO) and Ruehlen allegedly approved or directed unreceipted payments labeled as 'special handling' or 'procurement' to Nigerian officials to obtain TIPs and extensions and to post them as operating expenses.
- West Africa Audit findings (2003–2004) disclosed false paperwork and improper TIP practices; Audit Committee raised concerns about compliance.
- SEC asserts Jackson and Ruehlen knowingly circumvented internal controls and aided Noble’s FCPA and bookkeeping violations; Jackson challenged for control-person liability.
- Court grants the motions in part and denies in part, and allows amendment; addresses statute of limitations, tolling, and equitable relief implications.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Pleading sufficiency under FCPA 78dd-l(a)(3) elements | SEC argues no precise foreign-official identity required. | Defendants contend need for named or specific-official duties and preclude relying on 'facilitating' exception. | Pleading deemed adequate to proceed; may amend to address discreti on and Nigerian-law aspects. |
| Facilitating payments exception burden allocation | SEC bears no obligation to negate exception; should proceed on facts. | Defendants argue SEC must negate the facilitating payments exception. | Court places burden on defendants to negate the exception; exception treated as a threshold issue. |
| Corruptly element and intent against the facilitating exception | SEC pleads facts supporting wrongful purpose to influence officials. | Defendants claim good-faith belief payments were facilitating and thus lawful. | SEC has plausible facts of corrupt intent; amending may be needed to address discretionary actions. |
| Fraudulent concealment tolling and discovery rule | SEC seeks tolling based on concealment; discovery rule applies; defense counters. | Defendants argue lack of diligence and different test per Microtune. | Court adheres to Allan (securities context) but permits amendment to plead diligence; tolling may apply. |
Key Cases Cited
- United States v. Kay I, 359 F.3d 738 (5th Cir. 2004) (discusses FCPA elements and breadth of the statute)
- United States v. Kay II, 513 F.3d 432 (5th Cir. 2007) (definition of willfulness/corrupt intent in FCPA context)
- Stichting Ter Behartiging Van de Belangen Van, 327 F.3d 173 (2d Cir. 2003) (interpretation of 'corruptly' in FCPA context)
- McKelvey v. United States, 260 U.S. 353 (Supreme Court 1922) (burden shifting on exceptions; pleading standards)
- United States v. Outler, 659 F.2d 1306 (5th Cir. 1981) (exception/definition interplay in criminal statutes)
- SEC v. Ralston Purina Co., 346 U.S. 119 (Supreme Court 1953) (remedial purposes of securities statutes and burden of proof)
- Allan v. United States, 851 F.2d 1528 (5th Cir. 1988) (fraudulent concealment doctrine and diligence burden on plaintiff)
- Havens Realty Corp. v. Coleman, 455 U.S. 363 (U.S. Supreme Court 1982) (continuing violations doctrine framework reference)
- Bartek v. Microtune (unpublished), n/a (5th Cir. 2012) (cases cited regarding continuing violations and injunctive relief)