Earlier this year, Halliburton agreed to pay nearly $560 million in fines to the federal government to end an investigation into its former subsidiary, KBR, and its involvement in bribing Nigerian officials to get construction contracts. It was reportedly the largest fine ever paid by a U.S. company in a foreign bribery investigation.
But hey, this is Halliburton, which means the story never just ends there. The hits keep on coming.
A group of Halliburton shareholders are now suing the company, its officers and directors in Harris County District Court for allowing the illegal behavior which led to the mammoth fines, which led to a drop in share price and a loss to its stockholders.
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According to the lawsuit, "the defendants caused Halliburton to maintain internal controls that were so deficient that Halliburton insiders were able to divert millions of dollars of company funds to pay illegal bribes to various foreign officials in direct violation of the [Foreign Corrupt Practices Act]. Defendant's failure in this regard has caused substantial damage to Halliburton."
The plaintiff in this case is the Central Laborers' Pension Fund, which represents more than 6,400 retired laborers. The fund was the owner and holder of Halliburton common stock. It claims that as a result of the fines, which were paid to the U.S. Department of Justice and the Securities Exchange Commission, Halliburton recorded a $303 million loss due to discontinued operations in the fourth quarter of 2008, or rather, a loss of 34-cents a share.
The pension fund is seeking to win in court "an amount necessary to punish defendants and to make an example of defendants to the community," according to the lawsuit.