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The Securities and Exchange Commission has accused SAExploration Holdings Inc. and four former executives of an accounting fraud that falsely inflated the bankrupt seismic-data company’s revenue by about $100 million and hid the theft of millions of dollars, WSJ Pro Bankruptcy reported. Houston-based SAExploration filed for bankruptcy in August after warning about an investigation by the SEC and the Justice Department over matters related to revenue recognition and accounting. The SEC, in a lawsuit filed Thursday in a federal court in New York, said four former SAExploration officials, including former Chairman and Chief Executive Jeffrey H. Hastings, carried out a fraud to improperly book about $100 million of revenue from a purportedly legitimate and unrelated customer, Alaskan Seismic Ventures LLC. In reality, Alaskan Seismic was controlled by Mr. Hastings and former SAExploration Chief Financial Officer and General Counsel Brent N. Whiteley, creating the appearance of a major independent source of revenue for SAExploration, the SEC said. In fact, Alaskan Seismic was unable to pay SAExploration for seismic data, according to the complaint, yet in 2015 and 2016 SAExploration reported $141 million in revenue generated from the relationship.

The head of the U.S. Securities and Exchange Commission (SEC) said yesterday that the agency has brought 700 enforcement actions in the 2020 fiscal year, a ‘significant’ amount after March 15, Reuters reported. In a virtual address kicking off “SEC Speaks 2020,” an annual SEC enforcement conference put on in conjunction with the Practicing Law Institute, Jay Clayton said the agency had also obtained financial remedies of more than $4 billion, up from a year prior. The SEC has also reviewed disclosures of more than 10,700 funds -- including more than 1,200 new funds -- in 2020, an increase of 7 percent over last year, Clayton added.

The U.S. Securities and Exchange Commission (SEC) voted 3-2 yesterday to make it tougher for shareholders to push companies on issues such as climate change, social justice and diversity, with Democratic commissioners dissenting against the move, Reuters reported. The rule, first proposed by the SEC last November, raises the bar for submitting shareholder proposals to companies’ annual ballots and increases the proportion of the vote a proposal must win before it can be resubmitted. The SEC and corporate lobby groups have said the decades-old rules need to be modernized to stop niche issues clogging up corporate ballots — a risk that SEC chair Jay Clayton said on Wednesday could impose “significant” costs on companies and other shareholders. But the changes sparked blowback from many investors, lawmakers, and the SEC’s own Democratic commissioners, who warned it would kill proposals on climate change, racial justice, and the COVID-19 pandemic just as corporate America should be confronting these problems. “These issues are material to performance and shareholders…. Today’s rule amendments unnecessarily interfere with, and may chill, the live debate over these issues,” said Caroline Crenshaw, the agency’s new Democratic commissioner. Previously, an investor had to hold at least $2,000 of a company’s stock for one year to file a proposal — a threshold the SEC raised to three years on Wednesday. It also raised the proportion of the vote a proposal must win in order to be resubmitted to the ballot year-on-year.

The Securities and Exchange Commission (SEC) is poised to walk back a proposal to impose discretionary caps on whistleblower awards and tighten deadlines for formally filing tips when it votes to overhaul the bounty program this week, Reuters reported. The SEC today will finalize changes to its whistleblower program, but will water down these proposed measures after whistleblower advocates, lawyers and lawmakers said the changes could deter insiders from flagging corporate fraud and misconduct. In 2018, the SEC proposed here reworking the program which allows the SEC to reward tipsters whose original information leads to a penalty exceeding $1 million with between 10 percent and 30 percent of the fine. Created in the wake of the 2009 financial crisis, the program has resulted in more than $2 billion in penalties and $523 million in tipster rewards. The program attracts thousands of tips annually, public data shows, overwhelming SEC staff who can take years to assess all the claims and issue awards. SEC chair Jay Clayton has said he views the program as vital, but wants to make it more efficient and speed up awards. The SEC proposed, among other measures, giving staff more latitude when assessing the value of awards and the discretion to reduce some payouts if they exceeded $30 million.

The Securities and Exchange Commission is beefing up protections against fraud and manipulation in the lightly regulated market for over-the-counter stocks, the Wall Street Journal reported. The SEC yesterday approved a change to its rules that would largely prevent brokers from quoting prices for OTC stocks unless the companies issuing such shares released up-to-date financial information to the public. That would make it harder for individual investors to trade shares of OTC companies that have gone “dark,” meaning they have stopped releasing their financials. In turn, that would make it harder for would-be swindlers to use such stocks in schemes targeting small investors. OTC stocks aren’t listed on an exchange such as the New York Stock Exchange or the Nasdaq Stock Market. Many are so-called penny stocks, or stocks of tiny companies that trade for less than $5 a share. The SEC has suspended trading in hundreds of OTC stocks in recent years for failing to publish financial information. Such stocks have also been used in a number of illegal pump-and-dump schemes. In such a scheme, promoters affiliated with the holders of a particular stock stir up a buying frenzy in that stock, often by touting it on social media or bulletin boards, and then sell their holdings, leading to a price crash.

The U.S. Securities and Exchange Commission (SEC) yesterday adopted changes to its decades-old definition of a professional investor in order to allow more everyday Americans to buy shares in private companies, and eased come company disclosure rules, Reuters reported. The agency said that it hopes the changes to its “accredited investor” definition will boost retail investors’ access to the swelling pool of companies that are staying private for longer. But the change was criticized by investor advocates and agency officials who say even seasoned investors struggle to spot problems with private companies. Specifically, the agency broadened the definition of an accredited investor by adding a test of the investor’s sophistication “based on professional knowledge, experience, or certifications.” Previously, the definition was based largely on an investor’s income and wealth. The SEC did not say how many additional investors would fall under the new definition, but said it was aimed at individuals — such as hedge fund employees or brokers — who would not have previously qualified but are knowledgeable about private offerings. The changes also will cover family offices with at least $5 million in assets and will also make it easier for foreign nationals and residents of Native American reservations to qualify as accredited investors. 

Mark Frissora, the former chairman and chief executive officer of Hertz Global Holdings Inc., will return nearly $2 million in incentive-based compensation to settle a U.S. regulator’s claims that he played a key role in causing the now-bankrupt car-rental company to file inaccurate financial statements in 2013, Bloomberg News reported. Frissora pressured subordinates to “find money,” mainly by re-analyzing reserve accounts, as Hertz’s financial results fell short of forecasts in 2013, the Securities and Exchange Commission said in a statement Thursday. He also kept older cars in the company’s rental fleet longer to lower depreciation costs without disclosing the change to investors, the SEC said. Hertz reaffirmed earnings guidance in November 2013 despite internal projections that showed lower earnings per share figures, according to the SEC. The company then revised the results in 2014 and restated them in 2015, cutting previously reported pretax income by $235 million, the SEC said. Hertz agreed to pay $16 million to resolve SEC claims over the misstatements. Frissora, who agreed to settle without admitting or denying the SEC’s claims, will pay a $200,000 fine in addition to returning nearly $2 million in incentive-based pay. He left Hertz in September 2014 after investors pushed for his removal and went on to serve as president of Caesars Entertainment Corp. for four years through April 2019. Hertz, which filed for bankruptcy in May, said earlier this week that it is seeking debtor-in-possession financing. That came after the SEC raised questions about a plan to issue as much as $500 million of equity, forcing Hertz to terminate the offering after raising just $29 million from investors.

Eastman Kodak shares plummeted Monday after a federal agency put the brakes on the company’s deal to produce generic drug ingredients until “allegations of wrongdoing” are resolved, the Washington Post reported. Kodak closed yesterday at $10.52, down 29.3 percent. The stock has erased nearly 76 percent of its value since hitting $43.45 in late July. Last month, under an agreement aimed at reducing U.S. reliance on China, the U.S. International Development Finance Corporation (DFC) announced that it would give the photography pioneer a $765 million loan to retrofit its factories to make pharmaceutical ingredients. News of the deal — the first of its kind under the Defense Production Act — sent Kodak stock soaring. But last Tuesday, Sen. Elizabeth Warren (D-Mass.) asked the Securities and Exchange Commission to launch an insider trading inquiry, citing an unusually high volume of trading activity. On July 27, a day before the loan was officially announced, more than 1 million shares of Kodak stock exchanged hands, roughly quadruple its daily average, she said in a letter to SEC Chairman Jay Clayton. The stock jumped 20 percent that day, she wrote, and more than 200 percent on July 28, when the loan was announced. The DFC hit pause Friday, announcing in a tweet that it would “not proceed any further unless these allegations are cleared.”

The Securities and Exchange Commission is investigating the circumstances around Eastman Kodak Co.’s announcement of a $765 million government loan to make drugs at its U.S. factories, the Wall Street Journal reported. News of the loan last week caused Kodak’s shares to rise as high as $60, before falling to about $15 on Monday due to a dilution in the shares. Amid the heightened volatility, trading volume has surged. The price spike briefly produced a potential windfall for company executives who owned stock-option grants, some of which were granted on July 27, the day before the loan was officially announced. Among the areas being probed by regulators: how Kodak controlled disclosure of the loan, word of which began to emerge on July 27, causing Kodak’s stock price to rise 25 percent that day.