This is a photo of the National Register of Historic Places listing with reference number 7000063
Tuesday, February 24, 2015
Opening Remarks on SEC Investor Education and Advocacy to Military Service Men and Women at Ft. Hood
Opening Remarks on SEC Investor Education and Advocacy to Military Service Men and Women at Ft. Hood
SEC CHARGES FORMER EXEC. OF FORTUNE 500 COMPANY WITH INSIDER TRADING
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
02/19/2015 03:20 PM EST
The Securities and Exchange Commission announced insider trading charges against a former Fortune 500 company executive and his brother-in-law whom he allegedly tipped with nonpublic information ahead of the company’s merger.
The SEC alleges that while serving as vice president of construction operations at Baton Rouge-based The Shaw Group, Scott Zeringue traded company securities based on confidential information he learned on the job about an impending acquisition by Chicago Bridge & Iron Company. In the weeks leading up to the public announcement of the merger, Zeringue purchased 125 shares of Shaw common stock and asked his brother-in-law Jesse Roberts III, a dentist who lives in Ruston, La., to also purchase Shaw stock on his behalf.
Zeringue, Roberts, and others subsequently tipped by Roberts allegedly made nearly $1 million in combined illicit profits after the merger announcement caused the price of Shaw stock to increase by more than 55 percent.
In a parallel action, the U.S. Attorney’s Office for the Middle District of Louisiana today announced criminal charges against Roberts. Zeringue previously pled guilty to criminal charges and has agreed to settle the SEC’s charges by paying disgorgement of his ill-gotten trading profit of $32,006 plus a penalty of $64,012. He will be prohibited from serving as an officer or director of a publicly-traded company for 10 years. The settlement is subject to court approval.
“As charged in our complaint, Zeringue betrayed his duty to his company and its shareholders by tipping his brother-in-law with nonpublic information,” said Stephen L. Cohen, Associate Director in the SEC’s Division of Enforcement. “Armed with this inside knowledge, Roberts loaded up on option contracts that he knew would earn him a huge but illegal profit.”
According to the SEC’s complaint filed in U.S. District Court for the Western District of Louisiana, the insider trading occurred in the summer of 2012. Roberts reaped more than $765,000 through his illicit trading of call option contracts, and others made more than $154,000 from trading based on his tips. Roberts rewarded Zeringue for the original tip by giving him $30,000 in cash in November 2013. The SEC’s complaint charges Zeringue and Roberts with violations of the antifraud provisions of the federal securities laws.
The SEC’s continuing investigation is being conducted by Louis J. Gicale Jr. and Roger Paszamant under the supervision of Melissa A. Robertson. The SEC’s litigation against Roberts will be led by Derek Bentsen. The SEC appreciates the assistance of the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Middle District of Louisiana as well as the U.S. Secret Service, Internal Revenue Service Criminal Investigation, Options Regulatory Surveillance Authority, and Financial Industry Regulatory Authority.
Monday, February 23, 2015
Sunday, February 22, 2015
SEC CHARGES SALES EXEC. FOR ROLE IN FINANCIAL FRAUD INVOLVING CANADIAN ENERGY SERVICES BUSINESS
FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23191 / February 6, 2015
Securities and Exchange Commission v. Joseph A. Kostelecky, Civil Action No. 1:15-cv-00017-CSM (D.N.D.)
SEC Charges Sales Executive in North Dakota for Enabling Financial Fraud
The SEC alleges that Joseph A. Kostelecky, who was the company's only senior executive in the U.S., was among those responsible for Poseidon's fraudulent reporting of approximately $100 million in revenues for contracts that were either non-existent or uncollectable. Poseidon's business in the U.S. was focused on renting above-ground fluid storage tanks for oil-and-gas hydraulic fracturing operations. According to the SEC's complaint filed in federal court in North Dakota, Kostelecky directed Poseidon's accounting staff to record revenues for inadequately documented transactions and made false assurances to several members of Poseidon's management in Canada that transactions with U.S. customers were valid and collectible. Poseidon consequently issued three quarterly financial statements from January to November 2012 with materially inflated revenues while its stock was trading in the U.S. and Canada. The magnitude of the overstatements was substantial, comprising approximately 64 to 72 percent of total revenues reported over the first three fiscal quarters of 2012.
When Poseidon later announced publicly that it would need to restate its financials due to the inflated revenues, its stock price collapsed and the company eventually filed for bankruptcy. Poseidon was based in Calgary and operated a subsidiary with offices in Denver and Dickinson, N.D., where Kostelecky still resides.
Kostelecky agreed to settle the SEC's charges by paying a $75,000 penalty and being barred from serving as an officer or director of a U.S. publicly-traded company. Without admitting or denying the SEC's allegations, Kostelecky consented to a final judgment enjoining him from violations of Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The SEC's action against Kostelecky was filed in conjunction with an enforcement proceeding by the Alberta Securities Commission against Poseidon's senior management, including Kostelecky.
The SEC's investigation was conducted by Lee Robinson, Donna Walker, and Ian Karpel in the Denver Regional Office. The SEC appreciates the assistance of the Alberta Securities Commission.
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Saturday, February 21, 2015
Friday, February 20, 2015
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