Oil Company and Founder Settle SEC Charges for Executive Compensation Disclosure Failures

An oil company and its founder and former CEO settled SEC charges for disclosure failures in connection with the founder's stock pledges and executive perks.

In its Order, the SEC determined that the company incurred $380,594 in expenses on the founder's behalf that were unrelated to his position with the company. The company also failed to disclose $47,591 in authorized perks for the founder as required, leading to material misstatements and inaccurate recordkeeping by the company. The SEC found that the company and the founder violated recordkeeping and accounting requirements including SEA Sections 13(a) ("Requirements of annual reports"), Section 13(b)(2) ("Falsification of accounting Records"), et al., as well as proxy provisions of securities law including under Section 14(a)-3 ("Information to be furnished to security holders") and SEA Section 14(a)-9 ("False or misleading statements"), et al.

To settle the charges, the company and the founder agreed to cease and desist from violations, and the founder was ordered to pay a $195,046 penalty. The SEC noted the company's cooperation in the agency's investigation and the company's significant measures taken to remedy its violations, including hiring new personnel and implementing policies to safeguard against further violations of securities law.