WASHINGTON (Legal Newsline) — Former Energy XXI Ltd., CEO and board member John Schiller Jr., has accepted a permanent injunction after the U.S. Securities and Exchange Commission (SEC) filed charges alleging he hid more than $10 million in personal loans from vendors and a company board candidate.
In its complaint against Schiller, the SEC alleges he used a highly leveraged margin account secured by Energy XXI stock to take more than $7.5 million in undisclosed personal loans from company vendors in return for business contracts. The SEC also alleges Schiller received a $3 million loan from one of Energy XXI's largest shareholders, Mount Kellet Capital Management LP, which Schiller did not disclose. He is also accused by the SEC of receiving numerous, undisclosed compensations and perks.
“Executives of public companies have a duty to act in the best interests of investors,” SEC Division of Enforcement Assistant Director Anita Bandy said in a statement. “Secret backroom deals for the benefit of corporate insiders violate those duties and deprive investors of important information.”
Schiller's permanent injunction imposes a $180,000 penalty without his admitting or denying the charges. He is also barred from serving as an officer or director of any public company for five years.