The SEC charged an oilfield services company and its founder and former CEO for failure to disclose perks and stock pledges in accordance with Items 402 and 403 of Regulation S-K in violation of the federal securities laws. The discussion in the SEC’s Order on the D&O Questionnaire process, which the company subsequently enhanced in connection with more comprehensive remedial actions (including the creation of a new Disclosure Committee with its own disclosure counsel), is particularly noteworthy.
According to the Order, all of the D&O Questionnaires the former CEO completed for multiple SEC filings over a 3-year period misstated or omitted material information such as the stock pledge information and perks, some of which he charged to a corporate credit card, and others that were inappropriately incurred or authorized and paid directly by the company. He also completely failed to complete a D&O Questionnaire in one of the relevant years.
See Cooley’s post and our prior reports: “Perk Disclosure Reminder, "New C&DIs: Perks & Form S-3 Eligibility," and "Perk Identification & Disclosure."
This post first appeared in the weekly Society Alert!