The US Securities and Exchange Commission (SEC) has previously taken two Alberta-based Penn West Petroleum executives to court over their alleged scheme to purposely mislead deceive its investors over the company’s financial position. Now the SEC has effectively won the case, and Todd Takeyasu, the company’s former CFO, as well as Jeffrey Curran, Penn West’s former VP of finance, have been fined $100,000 and $55,000, respectively.
The alleged fraud occurred back in 2013, and the company has since changed its name to Obsidian Energy Ltd. The two executives falsified accounting documents by understating the company’s operating expenses which at the time were significantly higher than its competitors. In total, $281 million worth of falsified expenses were filed, under the pretense that Penn West was paying out royalties to land owners rather than incurring excessive operating expenses.
However the scheme was soon uncovered when the accounting manager overseeing the malpractice became frustrated and penned an email to Penn West’s CEO. As a result, the company hired an external accounting company to redo the books, while firing both Takeyasu and Curran in the meantime. Although Penn West says it has reported and amended the violations prior to the court injunction, SEC still continued with the civil charges in a New York federal court. Now as of Tuesday, the ruling ended up their favor. Curran was ordered to pay $55,000, Takeyasu has to pay $100,000, and both men are barred from future violations.
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