Baker Hughes filed its annual report at the end of last week and disclosed legal troubles on two different fronts. The company is one of the big three US oilfield services company. It has its head office near George Bush Intercontinental Airport.
In December 2020, the Company received notice that the Securities and Exchange Commission (SEC) is conducting a formal investigation into whether the company sold products and services on projects impacted by U.S. sanctions.
The company is cooperating with the SEC and providing requested information. The Company has also initiated an internal review with the assistance of external legal counsel regarding internal controls and compliance related to U.S. sanctions requirements.
Baker Hughes didn’t disclose any more details. However, Reuters reported that the company and 17 other firms had recently quit working on Russia’s Nord Stream 2 gas pipeline to avoid being sanctioned for it.
The company has been fined by the SEC before for breaches of the Foreign Corrupt Practices Act (FCPA). In 2007, it paid $23 million in relation to bribes in Kazakhstan. It also paid a $10 million fine as its actions in Kazakhstan breached an earlier 2001 cease-and-desist order related to bribes paid in Indonesia.
The other legal issue relates to its new helix logo. In December 2019, Houston-based BMC Software sued Baker Hughes. It alleged that Baker’s logo infringed on a trademark that BMC holds (see its logo below). The lawsuit is still ongoing.
Normally, most customers wouldn’t confuse a software company and an oilfield services company. However, Baker Hughes announced an alliance with Microsoft in November 2018 to bring ‘enterprise artificial intelligence solutions to the energy industry’. As a result, BMC argues that the new logo is likely to ’cause confusion, mistake and deception, among consumers, the public and the trade’.