US Securities and Exchange Commission (SEC) has charged Miller Energy Resources and its two executives for inflating the value of its oil and gas assets in company financial reports.
The firm’s former chief financial officer Paul Boyd and present chief financial officer David Hall have allegedly overstated the value of the company’s 2009-accquired Alaskan oil and gas properties by more than $400m.
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Miller Energy, which had acquired the properties for $2.25m cash consideration and $2m for debt liabilities, had showed those on its books at $480m in early 2010.
Audit team leader Carlton Vogt at the firm’s former independent auditor Sherb & Co. has also been charged over the same issue for improper professional conduct.
The inflated valuation had affected the net income and total assets of the company. It had allowed the penny stock company to transform itself into a New York Stock Exchange-listed company valued in 2013 at $393m.
SEC Atlanta associate regional director William P. Hicks said: "Financial statement information is the cornerstone of investment decisions.
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By GlobalData"We’ve charged that Miller Energy falsified financial statement information and grossly overstated the value of its Alaska assets and that the company’s independent auditor failed to conduct an audit that complied with professional standards.
"The SEC will aggressively prosecute such conduct."
SEC’s Division of Enforcement is trying to obtain cease-and-desist orders, civil monetary penalties, and return of allegedly ill-gotten gains from the firm and its two associates.
The federal authority wants Miller, Boyd and Hall to pay civil fines and surrender the improper gains.
The company, however, maintains that ‘the action is not warranted by the facts or the law’ and wants the issues to be ‘heard in the more neutral forum of the federal courts.’
