Dive Brief:
- The Securities and Exchange Commission (SEC) has settled charges against Oklahoma-based gas exploration and production company Gulfport Energy Corporation for failing to properly disclose perks provided to its CEO.
- The SEC gave the company high marks for its cooperation and effort to fix the problem.
- "After discovering its disclosure failures, Gulfport's timely remediation and cooperation in our investigation were key factors in the Commission's decision not to impose a penalty against the company," said Melissa Hodgman, acting director of the SEC's enforcement division. The SEC imposed a civil fine on the company's CEO, however.
Dive Insight:
From 2014 to 2018, Gulfport failed to disclose approximately $650,000 in executive compensation in the form of perquisites received by CEO Michael Moore.
The undisclosed perquisites included Moore’s use of Gulfport's chartered aircraft and personal use of a corporate credit card that, because the charges were not repaid on a timely basis, amounted to interest-free credit. The CEO also carried a related-person account receivable.
The company also failed to disclose that it paid Moore's son's landscaping company approximately $152,000 in 2015 for its services.
The SEC said Moore caused the violations — to reporting, book, records, control, and proxy provisions — by failing to provide information that the company could have used to identify and disclose the perquisites and related-person transactions.
As soon as it learned of the problems, the SEC said, the company replaced key personnel, developed an internal audit function, enhanced its policies and procedures, and added to its review and tracking processes.
Separately, the SEC charged Moore for violating anti-fraud and proxy provisions of federal securities laws. Without admitting or denying the findings, Moore agreed to pay an $88,248 civil penalty.
