SEC Launches Probe Into Halliburton

Oilfield services company Halliburton Co. said late on Thursday the U.S. Securities and Exchange Commission (SEC) had launched a formal investigation into its disclosure and accounting practices.

Halliburton said the probe would look at "cost overruns" on certain engineering and construction jobs.

By launching a formal investigation, the SEC has power to subpoena documents related to Halliburton's bookkeeping, including information from third parties. The matter was formerly the subject of an ongoing inquiry that was not considered a formal investigation.

Halliburton is just the most recent major U.S. company subject to the new regulatory crackdown following the Enron Corp. and WorldCom Inc. scandals that rocked Wall Street.

The probe adds to the legal and regulatory woes at Houston-based Halliburton, which said on Wednesday it would pay $4 billion in cash and stock to resolve 300,000 asbestos-related personal injury lawsuits.

The company said it believed the formal investigation was a "necessary step toward resolution of this matter".

Halliburton said on Nov. 12 it submitted about 200,000 documents to the SEC as part of the inquiry into accounting practices.

The agency opened a preliminary investigation in late May and issued a request on June 11 for documents related to cost overruns on construction projects at Halliburton, which was led by Vice President Dick Cheney until 2000.

Halliburton has said it fulfilled that request and also met with SEC staff to discuss the response. The company received a second request on July 11 seeking more explanations and supporting documents.

The Houston-based company and Vice President Cheney, who led the company from 1995 to 2000, were sued in July by Judicial Watch, a public ethics watchdog group that alleged the company overstated its revenue by as much as $445 million over three years.

The company and the White House have said the lawsuit was without merit. Halliburton has also said it applied accounting rules correctly to the construction projects.