WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced June 28 that Penn West Petroleum Ltd. and three former top finance executives have been charged with accounting fraud.
"Combating financial fraud is critical to maintaining a fair and transparent marketplace," said Stephanie Avakian, co-director of the SEC's Enforcement Division. "We will continue to vigorously pursue and punish corporate executives and other individuals whose actions violate the federal securities laws."
According to the SEC, Penn West, which has since been renamed Obsidian Energy Ltd., fraudulently moved money from operating expenses to capital expenditures. Because of this alleged fraud, Penn West was able to artificially reduce its operating costs and in turn create falsely improved metrics for oil extraction efficiency and profitability.
"As alleged in our complaint, Penn West's widespread accounting abuses were directed by its most senior accounting executives," said Gerald W. Hodgkins, associate director in the SEC's Enforcement Division. "These executives breached their disclosure obligations to investors and kept hidden from the market the true nature of a key financial metric and the company's struggle to control its operating expenses."
Handling the case for the SEC are Matthew T. Spitzer and Colin J. Rand, Anita B. Bandy, Sarah H. Concannon, Thomas A. Bednar, and Matthew Spitzer. The SEC noted its appreciation for the assistance of the Alberta Securities Commission.