Firm’s ‘misstatements’ lead to SEC investigation
SAExploration removes two top executives
The U.S. Securities and Exchange Commission is investigating Houston-based SAExploration Holdings for allegedly providing “material misstatements” and misleading financial information to its investors and to the federal agency over the past four years, according to documents filed by the company with the SEC.
SAExploration, an international oil field services company that reported $95 million in revenues in 2018, stated in newly filed SEC documents that it has fired its general counsel, who also served as its chief financial officer, and has removed its chairman and CEO.
In a filing with the SEC last week, SAExploration stated that its financial statements between 2015 through 2019 “should no longer be relied upon” because they “contained errors and should be restated.” The company stated that it “has retained legal counsel” but did not identify the lawyers or law firm.
Newly appointed board Chairman Michael Faust and interim CFO Kevin Hubbard said in a media statement that the company is cooperating with the SEC and that it has hired an outside accounting firm to lead an internal investigation.
On Tuesday, the first shareholder securities class-action lawsuit was filed in federal court in
Houston.
“The full impact of the errors contained in the company’s financial statements and related disclosures has not yet been determined, but, based on the knowledge the company has at this time, it is reasonable to conclude that the errors will be material to the financial statements relating to the nonreliance periods,” SAExploration stated in its SEC filing.
“In light of the above, the company has determined that a material weakness exists in the company’s internal control over financial reporting and that disclosure controls and procedures were ineffective during the Non-Reliance Period,” according to the filing, signed by Hubbard.
SAExploration states that it offers a “full range of vertically integrated seismic data acquisition, data processing and interpretation, and logistical support services” to large independent and national oil companies in the U.S., Asia and the Middle East.
SAExploration’s board stated that it fired Brent Whiteley, a 1990 graduate of the South Texas College of Law in Houston, earlier this month. Whiteley, who received his MBA from Rice University, had been an executive at SAExploration since March 2011 and held the title of chief financial officer.
In its statement to the SEC, SAExploration said longtime chairman and CEO Jeff Hastings has resigned from the board and has been placed on administrative leave but has agreed to cooperate with the company’s internal investigation.
Neither Whitely nor Hastings could be reached for comment. Officials at SAExploration did not respond to a request for an interview.