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Tuesday
Aug242004

Shell settles securities fraud violations for $1 in disgorgement.

According to a press release issued by The "Shell" Transport and Trading Company, P.L.C, Royal Dutch Petroleum Company and the Shell Group of Companies (Collectively "Shell"), the United Kingdom Financial Services Authority ("FSA") and the United States Securities and Exchange Commission ("SEC") today announced the final settlements that they have reached respectively with Shell. These settlements resolve the FSA's and SEC's investigations into the reserves recategorisation issues for the Shell companies. Consistent with the terms of the previously-announced agreements in principle, Shell settled without admitting or denying the findings and conclusions in the FSA's Final Notice and the SEC's Cease and Desist Order issued today. Shell also agreed to pay penalties of GBP17 million and $120 million in the FSA and SEC settlements, respectively, and committed in the SEC settlement to spend an additional $5 million for the development and implementation of a comprehensive internal compliance programme.

Not mentioned in the press release, but in the SEC announcement, Shell only has to pay $1 (one dollar) in disgorgement. Once again we see that the SEC's function in not to obtain releif for defrauded investors. For more detail see the Cease and Desist Order.

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