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An oilfield service company has reportedly agreed to a $3.5 million settlement to revolve claims of investor fraud.
In 2019, lead plaintiffs Tony Tep and Amrit Kumar accused SAExploration Holdings Inc. of misleading investors after the company was the subject of a regulatory investigation into its revenue reports and accounting practices. As a result of the regulatory action, the Security and Exchange Commission (SEC) and company agreed to settle for an undisclosed amount; however, SAE was not required to award any money to investors or disgorge any profit.
A key issue in the SEC investigation was an allegation that the oilfield service company inflated its revenue by $141 million in investor reports. In addition, the class action lawsuit claimed that investors lost money when the regulatory probe was announced as SAE share prices plummeted 34 percent upon the announcement.
Further, the oilfield service company reportedly failed to classify another company correctly or disclose its controlling interest in financial reports spanning 2015 through 2018.
In addition, SAE reportedly experienced a recent Chapter 11 bankruptcy proceeding, further muddying the waters for potential recovery in the investor class action lawsuit.
“There are invariably risks associated with litigating a complex case such as this — particularly where, as here, defendants have denied and continue to deny each, any, and all allegations of wrongdoing, fault, liability, or damage whatsoever that have or could have been asserted in the Amended Complaint,” states the motion seeking preliminary approval of the settlement.
The oilfield service company refuses to admit any liability under the terms of the $3.5 million settlement agreement. If approved by the Texas federal court, Class Members will include those who purchased SAE stock between March 15, 2016 and August 2019.
Are you an SAE investor? Did you experience losses as a result of the oilfield service company’s allegedly dodgy accounting practices? Tell us about it in the comment section below.
The lead plaintiffs and Class Members are represented by Reed Kathrein, Danielle Smith, Lucas Gilmore, and Steve Berman of Hagens Berman Sobol Shapiro LLP; Phillip Kim, Laurence Rosen, and Brent LaPointe of the Rosen Law Firm; Marion Reilly and John Martinez of Hilliard Martinez; and Stuart L. Cochran and Braden M. Wayne of Steckler Wayne Cochran PLLC.
The SAE Investor Fraud Class Action Lawsuit is John Bodin et al. v. SAExploration Holdings Inc. et al., Case No. 4:19-cv-03089, in the U.S. District Court for the Southern District of Texas.
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