SEC, Department Of Justice Looking At Petrobras
In a Deutsche Bank Markets Research note out Tuesday morning, analyst Alexander Burgansky said that, "Yesterday, Petrobras announced that on 21 November 2014 it received a subpoena from the US Securities and Exchange Commission (SEC) requesting certain documents relating to the SEC's investigation of the company."
Separately, Reuters reported Monday that Petroleo Brasileiro Petrobras SA (ADR) (NYSE: PBR) is also being investigated by the U.S. Department of Justice, which looks into the potential violation of the U.S. Foreign Corrupt Practices Act.
According to Burgansky, the investigation is a follow to the "Lava Jato Operation," conducted by the Brazilian Federal Police, which uncovered alleged corrupt practices at Petrobras. He goes on to say that "On 8 October 2014, the testimonies of former Petrobras Downstream Executive Director, Paulo Roberto Costa, and Mr. Alberto Youssef disclosed information regarding alleged overpayment for supplies of goods and services by Petrobras and related kickbacks received by some of the Petrobras officials, allegedly used for the funding of political activities. It appears to us that the SEC and DOJ investigations represent the steps taken by the US authorities on the back of the revelations of the Lavo Jato Operation."
The Wall Street Journal recently reported that the alleged corruption scheme at Petrobras may have totaled $1.6 billion.
Shares of Petrobras were trading more than 6 percent higher in the premarket at $11.17.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.