ERHC Energy Inc (ERHE)

[vip1999]

Some one mentioned FCPA violation, perhaps this is what they are doing...
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http://www.fcpaenforcement.com/explained/explained.asp
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II. RECORD KEEPING AND ACCOUNTING PROVISIONS:

These provisions require (1) that books, records and accounts are kept in reasonable detail to accurately and fairly reflect transactions and dispositions of assets, and (2) that a system of internal accounting controls is devised (a) to provide reasonable assurances that transactions are executed in accordance with management's authorization; (b) to ensure that assets are recorded as necessary to permit preparation of financial statements and to maintain accountability for assets; (c) to limit access to assets to management's authorization; and (d) to make certain that recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. These provisions are currently read to apply to U.S. issuers and all of their majority-owned subsidiaries, both U.S. and non-U.S. In addition, the Act requires that a company make a good faith effort to ensure that any company (including joint ventures) in which the U.S. company or one of its subsidiaries holds fifty (50) percent or less of the voting power comply with the FCPA accounting provisions. Significantly, management may be held accountable by U.S. enforcement authorities for what it should reasonably have known. Management's lack of knowledge of a transaction which violates the Act may not be sufficient to avoid liability, particularly in the absence of adequate internal controls. Note that the accounting provisions apply only to issuers that have securities registered with the SEC pursuant to the Securities Exchange Act of 1934 (essentially, all publicly held companies in the U.S., and any foreign companies listed on the U.S. stock markets).
If the DOJ brings criminal charges against a company under the record-keeping and accounting provisions, any intentional misrecording of a payment is a violation, so the prosecutor does not have to prove that the payment was a bribe. In addition, failure to describe what actually occurred is also a potential violation. For example, recording a payment for legal commission on a project in the books as "equipment repair" could be a violation.


III. PENALTIES: Criminal penalties under the FCPA are severe.

The Securities and Exchange Commission (SEC) and the DOJ share enforcement responsibility for the FCPA. The DOJ is responsible for all criminal prosecutions under the statute and for civil enforcement against privately held companies. The SEC has civil jurisdiction over publicly held companies.

1) Criminal Penalties per Violation

Criminal penalties for violations of the FCPA's antibribery provisions can be quite severe. Corporations and other business entities are subject to a fine of up to $2,000,000 per violation. Officers, directors, stockholders, employees, and agents are subject to a fine of up to $250,000 per violation and imprisonment for up to five years. Under the Alternative Fines Act, the actual fine may be up to twice the benefit that the defendant sought to obtain by making the corrupt payment. Fines imposed on individuals may not be paid by their employer or principal.

2) Civil Penalties per Violation

The Attorney General or the SEC may bring a civil action for a fine of up to $10,000 per violation against any issuer as well as any officer, director, employee, or agent of a firm, or stockholder acting on behalf of the issuer, who violates the antibribery provisions.

3) Penalties per Violation of the Books & Records Provisions:

Any person who willfully violates the FCPA books and records provisions or any person who willfully and knowingly makes, or causes to be made, any statement in any application, report, or document required to be filed in violation of those provisions shall upon conviction be fined not more than $5,000,000, or imprisoned not more than 20 years, or both, except that when the violation is made by an issuer rather than a natural person, a fine not exceeding $25,000,000 may be imposed. As before, the Alternative Fines Act applies, so that the monetary fine can be up to twice the benefit that the defendant sought to obtain through the violation.

Text of FCPA: