Texas oilfield products and services company ProPetro and former CEO Dale Redman have settled costs that they understated his executive benefits by failing to disclose ProPetro experienced reimbursed him for much more than $four hundred,000 in own and travel costs.
In accordance to the U.S. Securities and Trade Commission, ProPetro did not include the costs, which includes Redman’s use of his own Learjet for excursions that were not immediately related to the functionality of his CEO responsibilities, in its proxy statements for fiscal 2017 and 2018.
As a consequence, the statements discovered only $10,800 in benefits for 2017, instead of $153,370, and $19,248 for 2018, instead of $304,863, symbolizing a overall understatement of $428,125, the SEC claimed in an administrative get.
Redman also allegedly unsuccessful to disclose to ProPetro staff that he experienced pledged all of his inventory in the firm as collateral for a non-public actual estate financial loan, ensuing in inaccurate disclosures of his inventory possession in general public filings.
The SEC’s administrative get did not mention the company’s CFO. Soon after an audit committee investigation of a different subject, which did not consequence in any fiscal restatements, in the drop of 2019 ProPetro named a new executive chair as well as a new interim CFO, standard counsel, and chief accounting officer.
To settle the allegations around executive benefits, ProPetro and Redman agreed to stop-and-desist from more violations, and Redman agreed to fork out a $195,046 penalty.
“The federal securities guidelines are crystal very clear: issuers have to precisely disclose and document executive compensation and inventory possession. ProPetro unsuccessful in both equally respects,” David Peavler, director of the SEC’s Fort Truly worth regional office, claimed in a information launch.
Redman served as CEO of ProPetro from August 2006 right until his resignation in March 2020. He principally utilized his Learjet for enterprise travel but in accordance to the SEC, ProPetro reimbursed him $forty two,519 in 2017 and $117,279 for own excursions.
The SEC claimed Redman omitted his own excursions on the Learjet in the directors & officers questionnaires he submitted to ProPetro.
In addition, he allegedly unsuccessful to disclose that he and customers of his family members experienced utilized ProPetro credit rating playing cards to charge $127,698 of own costs and ProPetro allegedly unsuccessful to appropriately disclose $forty seven,591 in extra benefits for Redman that were authorized and paid out for immediately by the firm.
The poor disclosures of benefits arrived to gentle, the SEC claimed, right after ProPetro’s board initiated an interior investigation of a different subject. Redman reimbursed the firm for $345,636 in August 2019.