In the Matter of Occidental Petroleum Corp.

Occidental Petroleum Corporation (Oxy) (defendant) was a company that conducted worldwide exploration for, development of, and production of natural resources, including oil, gas, and coal. Oxy also marketed and distributed petroleum and petroleum products. Oxy manufactured and distributed chemicals through a wholly owned subsidiary, Hooker Chemical Corporation (Hooker). Oxy’s securities were registered with the Securities and Exchange Commission (SEC) and traded publicly. Oxy’s annual report for 1979 indicated that Oxy’s net sales were $9.55 billion, with net income of roughly $561.7 million. About 42 percent of Oxy’s total revenues came from oil-and-gas exploration and production in Libya and other countries. About 21 percent of Oxy’s total revenues came from chemical operations. The SEC’s enforcement division instituted an investigation of Oxy to determine whether Oxy had failed to make certain required disclosures in its SEC filings. Specifically, the SEC was concerned that Oxy’s filings were missing information regarding (1) administrative and judicial proceedings against Oxy concerning the allegedly improper discharge of pollutants into the environment, (2) the effects of complying with environmental-protection regulations on Oxy’s expenditures and earnings, (3) Hooker’s potential liability stemming from the operation of waste-disposal sites in New York state, (4) the facts and circumstances of Oxy’s decision to halt construction of a refinery in England, (5) matters concerning Oxy’s negotiations with the Libyan government to conduct operations in Libya, and (6) the facts and circumstances of a request by Oxy’s board chairman, Dr. Armand Hammer, that certain board nominees submit undated resignation letters for Oxy’s personnel files. When the SEC instituted the investigation, Oxy submitted an offer of settlement to the SEC. Oxy offered to (1) designate a director to prepare an environmental report with the required disclosures, including information regarding environmental proceedings, compliance costs, and potential civil penalties; and (2) change the policy of requesting undated resignation letters, among other things.