Halliburton 2013 Annual Report Download - page 77

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Securities and related litigation
In June 2002, a class action lawsuit was filed against us in federal court alleging violations of the federal securities
laws after the Securities and Exchange Commission (SEC) initiated an investigation in connection with our change in
accounting for revenue on long-term construction projects and related disclosures. In the weeks that followed, approximately
twenty similar class actions were filed against us. Several of those lawsuits also named as defendants several of our present or
former officers and directors. The class action cases were later consolidated, and the amended consolidated class action
complaint, styled Richard Moore, et al. v. Halliburton Company, et al., was filed and served upon us in April 2003. As a result
of a substitution of lead plaintiffs, the case was styled Archdiocese of Milwaukee Supporting Fund (AMSF) v. Halliburton
Company, et al. AMSF has changed its name to Erica P. John Fund, Inc. (the Fund). We settled with the SEC in the second
quarter of 2004.
In June 2003, the lead plaintiffs filed a motion for leave to file a second amended consolidated complaint, which was
granted by the court. In addition to restating the original accounting and disclosure claims, the second amended consolidated
complaint included claims arising out of our 1998 acquisition of Dresser Industries, Inc., including that we failed to timely
disclose the resulting asbestos liability exposure.
In April 2005, the court appointed new co-lead counsel and named the Fund the new lead plaintiff, directing that it file
a third consolidated amended complaint and that we file our motion to dismiss. The court held oral arguments on that motion in
August 2005. In March 2006, the court entered an order in which it granted the motion to dismiss with respect to claims arising
prior to June 1999 and granted the motion with respect to certain other claims while permitting the Fund to re-plead some of
those claims to correct deficiencies in its earlier complaint. In April 2006, the Fund filed its fourth amended consolidated
complaint. We filed a motion to dismiss those portions of the complaint that had been re-pled. A hearing was held on that
motion in July 2006, and in March 2007 the court ordered dismissal of the claims against all individual defendants other than
our Chief Executive Officer (CEO). The court ordered that the case proceed against our CEO and us.
In September 2007, the Fund filed a motion for class certification, and our response was filed in November 2007. The
district court held a hearing in March 2008, and issued an order November 3, 2008 denying the motion for class certification.
The Fund appealed the district court’s order to the Fifth Circuit Court of Appeals. The Fifth Circuit affirmed the district court’s
order denying class certification. On May 13, 2010, the Fund filed a writ of certiorari in the United States Supreme Court. In
January 2011, the Supreme Court granted the writ of certiorari and accepted the appeal. The Court heard oral arguments in April
2011 and issued its decision in June 2011, reversing the Fifth Circuit ruling that the Fund needed to prove loss causation in
order to obtain class certification. The Court’s ruling was limited to the Fifth Circuit’s loss causation requirement, and the case
was returned to the Fifth Circuit for further consideration of our other arguments for denying class certification. The Fifth
Circuit returned the case to the district court, and in January 2012 the court issued an order certifying the class. We filed a
Petition for Leave to Appeal with the Fifth Circuit, which was granted. In April 2013, the Fifth Circuit issued an order affirming
the District Court's order certifying the class.
We filed a writ of certiorari with the United States Supreme Court seeking an appeal of the Fifth Circuit decision. In
November 2013, the Supreme Court granted our writ. Oral argument is scheduled to be held before the Supreme Court on
March 5, 2014. Fact discovery in this case has resumed. We cannot predict the outcome or consequences of this case, which we
intend to vigorously defend.
Investigations
We are conducting internal investigations of certain areas of our operations in Angola and Iraq, focusing on
compliance with certain company policies, including our Code of Business Conduct (COBC), and the FCPA and other
applicable laws.
In December 2010, we received an anonymous e-mail alleging that certain current and former personnel violated our
COBC and the FCPA, principally through the use of an Angolan vendor. The e-mail also alleges conflicts of interest, self-
dealing, and the failure to act on alleged violations of our COBC and the FCPA. We contacted the DOJ to advise them that we
were initiating an internal investigation.
During the second quarter of 2012, in connection with a meeting with the DOJ and the SEC regarding the above
investigation, we advised the DOJ and the SEC that we were initiating unrelated, internal investigations into payments made to
a third-party agent relating to certain customs matters in Angola and to third-party agents relating to certain customs and visa
matters in Iraq.
Since the initiation of the investigations described above, we have participated in meetings with the DOJ and the SEC
to brief them on the status of the investigations and have been producing documents to them both voluntarily and as a result of
SEC subpoenas to us and certain of our current and former officers and employees.
We expect to continue to have discussions with the DOJ and the SEC regarding the Angola and Iraq matters described
above and have indicated that we would further update them as our investigations progress. We have engaged outside counsel
and independent forensic accountants to assist us with these investigations.
During the second quarter of 2013, we received a civil investigative demand from the Antitrust Division of the DOJ
regarding pressure pumping services. We have engaged in discussions with the DOJ on this matter and have provided responses