Royal Dutch/Shell Group July 29 said it has reached agreements in principle (AIP) with the UK's Financial Services Authority and US Securities and Exchange Commission staff to resolve their pending inquiries related to the company's oil and gas reserves revisions (see Watching Government, p. 28).
The company will pay a total of $151 million in government fines—$120 million to the SEC and the equivalent of about $31 million to UK regulators. SEC officials refused comment on the Shell announcement. In connection with the AIP with FSA, Shell said that it "will agree, without admitting or denying the FSA's findings or conclusions, to the entry of a Final Notice by the FSA finding that Shell breached market abuse provisions of the UK's Financial Services and Markets Act 2000 and the Listing Rules made under it."
With the SEC, "Shell will consent, without admitting or denying the SEC's findings or conclusions, to an administrative order finding that Shell violated, and requiring Shell to cease and desist from future violations of, the antifraud, reporting, recordkeeping, and internal control provisions of the US federal securities laws and related SEC rules."
Along with the $120 million civil penalty the company plans to spend an additional $5 million developing a comprehensive internal compliance program. The AIP with the SEC staff is subject to final approval by the SEC.
