b'employees allegations regarding illegal paymentsintermediary was incapable of rendering, and paid the or improve their compliance practices. Moreover, inintermediary pursuant to invoices for services that were 2014, the Shanghai Administration of Industry andnever provided. Instead, the intermediary directed a Commerce fined Cardinal China for providing a secretportion of the Saipem funds through offshore shell enti-commission to employees of a Chinese retailer for itsties to Algerian government officials or their designees, sales of the European cosmetic companys productsincluding the Algerian Energy Minister. Saipems Chief that was paid from the European cosmetic companysFinancial Officer participated in Saipems approval of marketing accounts at Cardinal China. Cardinal Chinathe sham contracts and facilitated the payments to the did nothing in response to improve compliance andintermediary in 2007 and 2008. In 2008, Saipems CFO internal controls. Finally, after Cardinal China discov- was promoted to become Enis CFO. In that position, ered that marketing employees were using marketinghe continued to facilitate Saipems illicit payments. accounts to buy cell phones for unknown reasons,The executive was discharged immediately upon Enis Cardinal Chinas Vice President of Compliance sentrealization of the sham contracts in 2012 and was later an email to a colleague, copying Cardinal Chinassentenced by an Italian trial court to 49 months in prison President, highlighting the enormous compliancefor the crime of international corruption. risk that Cardinal China faced. Another Cardinal China employee observed that the company faced big exposure because it ha[d] no control [over] how [the marketing employees] may be gifting and spending onThe bribery scheme resulted in Eni entertaining. In the face of these numerous red flags,preparing consolidated financial statements Cardinal Health and Cardinal China failed to implement adequate risk-mitigation and compliance measures.that failed to accurately record the true The SECs order noted that Cardinal Health had self-nature of Saipems transactions with the reported the FCPA violations, cooperated with theintermediary. Instead, Eni indicated in its SECs investigation, and taken significant remedial measures such as improving internal controls, addingfilings with the SEC that those payments anti-bribery provisions to the operative contracts,were lawful brokerage fees. Eni claimed closing the marketing accounts from which the illegal payments had been made, and terminating thethese brokerage fees as legitimate business complicit marketing employees.expenses and obtained a tax benefit of Cardinal Health agreed to pay $5.4 million in disgorge- roughly $57 million.ment, $917,000 in prejudgment interest, and a civil monetary penalty of $2.5 million. The Company also was ordered to cease and desist committing any violations of the FCPAs books and records and internalThe bribery scheme resulted in Eni preparing consol-accounting controls provisions. idated financial statements that failed to accurately record the true nature of Saipems transactions with In re Eni S.p.A., No. 3-19751 the intermediary. Instead, Eni indicated in its filings with the SEC that those payments were lawful brokerage On April 17, 2020, the SEC announced a ceasefees. Eni claimed these brokerage fees as legitimate and desist order (the Order) with recidivist Italianbusiness expenses and obtained a tax benefit of multinational oil and gas company, Eni S.p.A. (Eni),roughly $57 million. The Order provides that Eni, as the whose American Depositary Receipts are listed oncontrolling minority shareholder of Saipem, failed to use the New York Stock Exchange. In 2010, Eni and itsits influence to cause Saipem to design and maintain former Dutch subsidiary Snamprogetti Netherlandssufficient internal accounting controls. B.V. (Snamprogetti) jointly paid $125 million toAccording to its SEC filings, Saipem initiated an resolve FCPA charges with the SEC in connection withinternal investigation into these contracts with the Snamprogettis bribery scheme in Nigeria. intermediary in 2013 and reported its findings to Eni. The most recent FCPA charges arise out of conductIn turn, Eni contacted both the DOJ and the SEC to by Enis subsidiary, Saipem S.p.A. (Saipem), whichvoluntarily inform them of the discovery. The DOJ then is alleged to have made 198 million in illegitimatecommenced its own investigation in 2013, the conclu-payments to an intermediary in order to obtainsion of which was that Eni had violated Section 13(b)(2)contracts with Algerias state-owned oil company.(A) and (B) of the Exchange Act and the FCPAs books Between 2007 and 2010, Saipem entered into fourand records and internal accounting control provisions. sham contracts with an intermediary for services theEni was ordered to cease and desist from any future 14'