1. This enforcement action arises from an elaborate, four?year?long fraud by Defendant SAExploration Holdings, Inc. (“SAE” or the “Company”) and four former senior SAE executives, Jeffrey H. Hastings (former Chief Executive Officer and Chairman of SAE’s Board of Directors), Brent N. Whiteley (former Chief Financial Officer and General Counsel), Brian A. Beatty (former Chief Operations Officer and, prior to that, Chief Executive Officer), and Michael J. Scott (former Executive Vice President of Operations).
2. SAE is a publicly traded seismic data acquisition company. SAE’s customers, mainly large oil and gas companies, hire SAE to collect (or “shoot”) proprietary seismic survey data used to identify and assess potential drilling locations. SAE historically struggled to maintain sufficient cash flow – a problem only exacerbated by a decline in oil prices beginning in late 2014 and into early 2015.
3. From as early as February 2015 through August 2019 (the “Relevant Period”), SAE and Hastings, Whiteley, Beatty, and Scott (the “SAE Executives”), devised and carried out a fraud to improperly recognize approximately $100 million of revenue from transactions with a purportedly legitimate and unrelated customer, Alaskan Seismic Ventures, LLC (“ASV”). In truth, however, ASV was created by the SAE Executives and controlled by Hastings and Whiteley.
34. Creating a purportedly unaffiliated entity to operate the data library offered three primary benefits.
36. Second, if the data library company appeared to be an unaffiliated third party, SAE could potentially recognize the revenue as it “sold” data to the third?party special purpose entity (“SPE”) – without having to identify and contract with actual end ?user customers.
40. In April 2015, Hastings recruited a business acquaintance, a former Director of the State of Alaska Oil and Gas Division, to establish a seismic data library company (the “ASV Owner”). Hastings’ business acquaintance formed ASV as an Alaska limited liability company in May 2015. None of the SAE Executives were identified on ASV’s organization documents. The ASV Owner was ASV’s sole employee and operated it out of a bedroom in his personal residence.
41. On July 1, 2015, SAE entered into a Master Services Agreement (“MSA”) with ASV, whereby SAE contracted to collect seismic data for ASV. The ASV Owner signed the MSA for ASV, and Scott signed on behalf of SAE. Soon thereafter, SAE and ASV executed five work orders pursuant to the MSA, for five data exploration locations in Alaska. Scott signed the first two work orders on behalf of SAE.
42. Although ASV was structured as a purportedly independent third party, Hastings and Whiteley effectively controlled ASV, as Beatty and Scott knew or were reckless in not knowing. Whiteley provided administrative and operational support to the ASV Owner, including, for example, providing him with contract templates and identifying potential financing opportunities for ASV. In addition, Hastings, Whiteley, and Scott located customers to license data from ASV – including customers who previously had purchased data directly from SAE. Indeed, SAE employees even negotiated directly with SAE customers on behalf of ASV.
B. The SAE Executives Misappropriated from SAE $12 Million and Covertly Invested Approximately Half In ASV
隱瞞關(guān)聯(lián)關(guān)系的手段：涉案高管從SAE盜取1200萬美元，將其中約600萬美元隱蔽投資于ASV公司
43. Beginning in June 2015, SAE began recognizing as revenue amounts owed to it by ASV. From the time of ASV’s creation in May 2015, the SAE Executives understood that ASV did not have sufficient funds to pay SAE pursuant to the MSA and that to pay SAE, ASV would need to generate cash from various sources, including finding third parties to license the data collected, by monetizing ASV’s Alaska Tax Credits, or otherwise finding sources of equity for ASV.
But, as of the fall of 2015 (and throughout the Relevant Period), ASV had only limited sales to licensees – and nothing close to what SAE recognized as revenue from its sales to ASV. Because ASV lacked funds to pay SAE amounts due under the MSA, SAE’s accounts receivable balance from ASV began to increase substantially over time. For example, by the end of 2015, SAE had recorded $83 million in revenue from ASV – $50 million of which remained outstanding as an account receivable.
48. The SAE Executives knew that an overt investment by SAE in ASV would derail their plan. At a minimum, it would render ASV an SAE affiliate, requiring consolidation of ASV into SAE’s financial statements and precluding the recognition of revenue from SAE’s transactions with ASV. It would also reduce the amount of Alaska Tax Credits that ASV would receive.
49. By no later than October 2015, the SAE Executives were aware of and actively participating in the illegal plan to make a covert equity investment in ASV, including by devising a plan to route funds from SAE, through various shell companies created and controlled by Whiteley and Hastings, to ASV.
63. The below diagram demonstrates the flow of misappropriated funds from SAE to ASV, specifically:
a. the misappropriation of $12 million via transfers to Global Equipment;
b. the routing of $5.9 million, through shell companies, to ASV; and
c. the round tripping of $5.8 million back to SAE in December 2015.
Round Tripping of Nearly $6 Million in Misappropriated SAE Funds
上述圖表系SEC調(diào)查出來的涉案高管一手操縱的隱蔽資金閉環(huán)。除SAE、ASV，其余4家公司Global Equipment (“GES”), Forza, Madison River 和Palmyra均系涉案高管控制的假冒空殼公司。
C. The SAE Executives “Round Tripped” Nearly $6 Million Through ASV and Back To SAE To Create the False Impression ASV Was Paying SAE
隱瞞關(guān)聯(lián)關(guān)系的手段：通過假冒空殼公司，進行隱蔽股權(quán)投資，實現(xiàn)資金閉環(huán)
50. Global Equipment was a sham company created by the SAE Executives in September 2015. In 2015 and 2016, Scott created fake and back?dated purchase orders and supporting documentation purporting to provide for SAE’s rental of equipment from Global Equipment for seismic?data surveys SAE had been conducting. In addition, Whiteley directed the drafting of a fake lease agreement between SAE and Global Equipment and of fake invoices from Global Equipment to SAE.
51. But Global Equipment did not actually own any such survey equipment, and the non?existent rentals were fabricated in order to provide a cover story for the misappropriation and routing of SAE money to ASV.
53. Between October 2015 and December 2016, the SAE Executives caused SAE to transfer approximately $12 million to Global Equipment.
56. In October and November 2015, Whiteley caused $6.3 million to be transferred from Global Equipment to two additional shell companies he and Hastings controlled. First, on or about October 26, 2015, Whiteley caused $3 million to be sent from Global Equipment to Forza Investments, an entity he controlled and created. Second, in November 2015, Whiteley caused an additional $3.3 million to be sent from Global Equipment to Madison River Investments, an entity Hastings controlled and created.
57. Next, approximately $6.1 million was transferred from Forza Investments and Madison River Investments – via a $2.8 million transfer in November 2015 and a $3.28 million transfer in December 2015, respectively – to a third entity called Palmyra Energy. Whiteley directed his neighbor to form Palmyra Energy in or around September 2015, to invest in ASV. To date, Palmyra Energy has received funds from no sources other than Forza Investments and Madison River Investments.
58. On or around December 4, 2015, Palmyra Energy used $5.9 million of the $6.1 million from Forza Investments and Madison River Investments to invest in ASV. As a result, Palmyra Energy – and in turn Whiteley and Hastings, who controlled Palmyra Energy – obtained an 85% ownership stake in ASV.
82. SAE’s financial statements were materially false because, contrary to Generally Accepted Accounting Principles (“GAAP”), SAE recognized revenue and disclosed accounts receivable balances from ASV as if the revenue and receivables were generated from legitimate, substantive transactions with an unaffiliated company, which Hastings, Whiteley, and Beatty knew was not true.
將SAE與ASV大量的商業(yè)交易按照與一家合法非關(guān)聯(lián)方進行交易來確認和披露收入、應(yīng)收款，該等會計處理違反GAAP準則，系重大虛假陳述；
83. From the second quarter of 2015 through the second quarter of 2016, SAE recognized $141 million in revenue from ASV. Of that amount, only $40 million was generated from legitimate end?user licensees. As a result, SAE materially overstated its revenue by approximately $100 million from the second quarter of 2015 through the second quarter of 2016 – which constituted approximately 36% of SAE’s revenue reported in its financial statements for the period. Accordingly, SAE’s Forms 10?Q for that period and its Forms 10?K for 2015 and 2016 were materially false.
84. Likewise, SAE’s subsequent Forms 10?K and 10?Q, from the third quarter of 2016 through the first quarter of 2019, were also materially false because they either incorporated the artificially?inflated revenue from 2015 and/or 2016 or materially overstated accounts receivable owed by ASV.
85. In addition, SAE’s Forms 8?K incorporating and attaching SAE’s quarterlyand annual earnings releases for the period June 2015 through March 2019 – all 16 of which Whiteley signed – were also materially false.
87. SAE’s public filings during the same period, in particular SAE’s Forms 10?K and 10?Q, contained the following, additional material misstatements and omissions made by SAE, Hastings, Whiteley, and Beatty:
a. They materially mischaracterized ASV as a legitimate third?party customer, responsible for large percentages of SAE’s revenue. For example, SAE’s 2016 Form 10?K, signed by Hastings and Beatty, identified ASV as a customer accounting for more than 10% in consolidated revenue that year but did not disclose that the revenue was improperly recognized.
虛假稱述ASV是一家為SAE貢獻高比例營收的合法第三方客戶，該虛假陳述系重大虛假陳述；
c. They contained materially misleading related party information by failing to disclose or include ASV as a related party. For example, SAE’s 2016 Form 10?K disclosed certain related parties owned and controlled by Hastings but did not identify ASV as a related party created by the SAE Executives and controlled by Hastings or Whiteley.
d. They contained materially misleading executive? compensation information by failing to include amounts misappropriated by the SAE Executives. For example, SAE’s 2016 Form 10?K incorporated by reference SAE’s 2017 Proxy Statement, which provided 2016 compensation information for the SAE Executives but failed to disclose the amounts each obtained from SAE through the fraudulent use of Global Equipment.
由于涉案高管侵占公司資金約600萬美元，導(dǎo)致重大誤導(dǎo)性高管薪酬信息披露；
e. They contained materially misleading information regarding SAE’s transactions with Global Equipment by, for example, failing to disclose that Global Equipment was a sham rental equipment company created and controlled by the SAE Executives. For example, SAE’s 2015 Form 10?K, signed by Beatty and Whiteley, did not identify Global Equipment as a related party or disclose the approximately $6.8 million paid from SAE to Global Equipment that year.
對SAE交易方GES公司的披露信息系重大誤導(dǎo)性陳述；
g. SAE’s financial statements improperly included funds misappropriated by the SAE Executives as supposedly legitimate business expenses. For example, amounts stolen by Whiteley and paid to RVI and other fictitious entities were booked as legal or consulting expenses in SAE’s financial statements throughout the Relevant Period.
SAE財務(wù)報表將涉案高管侵占資金不恰當記為營業(yè)費用。
109. Hastings, Whiteley, and Beatty lied to SAE’s auditors, in connection with audits and reviews of SAE during the Relevant Period.
110. Specifically, Whiteley, Hastings, and Beatty signed management representation letters to SAE’s auditors that each knew contained material misstatements.
涉案高管向其審計師就審計審閱期間相關(guān)事宜撒謊，特別是高管聲明書中包含大量重大不實陳述。
Concerned U.S. Securities Regulations
相關(guān)美國證券法規(guī)
(d)Injunction proceedings; authority of court to prohibit persons from serving as officers and directors; money penalties in civil actions
禁止令程序、禁止擔任高管、董事；民事訴訟程序中金錢賠償
(2)Authority of Court To Prohibit Persons From Serving as Officers and Directors.
禁止擔任高管、董事
In any proceeding under paragraph (1) of this subdiv, the court may prohibit, conditionally or unconditionally, and permanently or for such period of time as it shall determine, any person who violated div 78j(b) of this title or the rules or regulations thereunder from acting as an officer or director of any issuer that has a class of securities registered pursuant to div 78l of this title or that is required to file reports pursuant to div 78o(d) of this title if the person’s conduct demonstrates unfitness to serve as an officer or director of any such issuer.
本案中SAE和涉案高管的會計欺詐行為屬于違反div 78j(b)的行為，對于違反div 78j(b)的個人，若法院認為其行為顯示其已不適合擔任上市公司高管或董事，法院可有條件或無條件的，決定其永久的或在某一期間內(nèi)，禁止擔任上市公司高管或董事。
(3) Money Penalties in Civil Actions.—
民事訴訟程序中金錢賠償
(A) Authority of commission.—
Whenever it shall appear to the Commission that any person has violated any provision of this chapter, the rules or regulations thereunder, or a cease-and-desist order entered by the Commission pursuant to div 78u–3 of this title, other than by committing a violation subject to a penalty pursuant to div 78u–1 of this title, the Commission may bring an action in a United States district court to seek, and the court shall have jurisdiction to impose, upon a proper showing, a civil penalty to be paid by the person who committed such violation.
除div 78u-1關(guān)于內(nèi)幕交易的處罰另有規(guī)定外，對于本章節(jié)下的違法行為（本案會計欺詐屬于此情形）責任人，SEC可在美國地區(qū)法院提起民事賠償。
(B)Amount of penalty.—
賠償金額
(i)First tier.—
第一等級
The amount of the penalty shall be determined by the court in light of the facts and circumstances. For each violation, the amount of the penalty shall not exceed the greater of (I) $5,000 for a natural person or $50,000 for any other person, or (II) the gross amount of pecuniary gain to such defendant as a result of the violation.
就每一違法行為，處罰金額不超過兩者中較大數(shù)額者：(I) 5000美元/自然人，或5萬美元/法人；或 (II) 違法責任人因違法行為所獲得的金錢收益。
(ii)Second tier.—
第二等級
Notwithstanding clause (i), the amount of penalty for each such violation shall not exceed the greater of (I) $50,000 for a natural person or $250,000 for any other person, or (II) the gross amount of pecuniary gain to such defendant as a result of the violation, if the violation described in subparagraph (A) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement.
若違法行為涉及欺詐、欺騙、操縱、有意或疏忽違反監(jiān)管要求，處罰金額不超過兩者中較大數(shù)額者：(I) 5萬美元/自然人，或25萬美元/法人；或 (II) 違法責任人因違法行為所獲得的金錢收益。
(iii)Third tier.
第三等級
Notwithstanding clauses (i) and (ii), the amount of penalty for each such violation shall not exceed the greater of (I) $100,000 for a natural person or $500,000 for any other person, or (II) the gross amount of pecuniary gain to such defendant as a result of the violation, if—
(aa)
the violation described in subparagraph (A) involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement; and
(bb)
such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons.
若違法行為涉及欺詐、欺騙、操縱或有意或疏忽違反監(jiān)管要求，且違法行為導(dǎo)致他人巨大損失或使其面臨巨大損失的重大風(fēng)險，處罰金額不超過兩者中較大數(shù)額者：(I) 10萬美元/自然人，或50萬美元/法人；或 (II) 違法責任人因違法行為所獲得的金錢收益。
(D)Special provisions relating to a violation of a cease-and-desist order.—
關(guān)于違反行政禁令的特定規(guī)定
In an action to enforce a cease-and-desist order entered by the Commission pursuant to div 78u–3 of this title, each separate violation of such order shall be a separate offense, except that in the case of a violation through a continuing failure to comply with the order, each day of the failure to comply shall be deemed a separate offense.
若違法責任人未遵守SEC發(fā)出的行為禁令，對行政禁令的每一次違反，視為一次違法行為（從上述條文，我們可知，賠償金額以每一違法行為為計算單位，因此違法次數(shù)與賠償金額直接相關(guān)）；若責任人持續(xù)不遵守行政禁令，則未遵守的每一天算一次違法行為。
(5)Equitable Relief.—
衡平法救濟
In any action or proceeding brought or instituted by the Commission under any provision of the securities laws, the Commission may seek, and any Federal court may grant, any equitable relief that may be appropriate or necessary for the benefit of investors.
SEC可為投資人之利益向聯(lián)邦法院提起衡平法救濟。衡平法救濟是前述金額賠償之外的救濟，通常會要求SAE和涉案高管進行或不進行某一特定行為。
SOX Section 304(a)&(b) [15 U.S.C. § 7243(a)&(b)]
(a)Additional compensation prior to noncompliance with Commission financial reporting requirements
財務(wù)報告被發(fā)現(xiàn)不合規(guī)前CEO和CFO所獲報酬的返還
If an issuer is required to prepare an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with any financial reporting requirement under the securities laws, the chief executive officer and chief financial officer of the issuer shall reimburse the issuer for—
若上市公司因重大違法違規(guī)導(dǎo)致財務(wù)報表重述（本案中SAE進行了財務(wù)報表重述），則CEO和CFO應(yīng)向上市公司返還：
(1) any bonus or other incentive-based or equity-based compensation received by that person from the issuer during the 12-month period following the first public issuance or filing with the Commission (whichever first occurs) of the financial document embodying such financial reporting requirement; and
上市公司被重述的財務(wù)報表公告后12個月期間所獲得的獎金、激勵性質(zhì)或股權(quán)性質(zhì)的報酬；以及
(2) any profits realized from the sale of securities of the issuer during that 12-month period.
在該12個月期間將上市公司股票出售所獲利潤。
(b)Commission exemption authority
The Commission may exempt any person from the application of subdiv (a), as it deems necessary and appropriate.
SEC可視情況必要和適當時豁免CEO、CFO返還前述款項。
Disgorge illgotten gains
退還非法收益
Ordering Defendants Hastings, Whiteley, Beatty, and Scott, and Relief Defendants O’Neill and Hastings, to disgorge, with prejudgment interest, all ill?gotten gains or unjust enrichment derived from Defendants’ illegal conduct as set forth in this Complaint;
除前述金額賠償和CEO&CFO報酬返還外，SEC在控訴狀中還要求涉案高管退還因違法行為所獲得的一切非法收益、不當?shù)美袄ⅰ?/font>