The U.S. Securities and Exchange Commission is investigating Houston-based SAExploration Holdings for allegedly providing “material misstatements” and misleading financial information to its investors and to the federal agency over the past four years, according to documents filed by the company with the SEC.
SAExploration, an international oilfield services company that reported $95 million in revenues in 2018, stated in newly filed SEC documents that it has fired its general counsel, who also served as its chief financial officer, and has removed its chairman and chief executive officer.
In a 23-page filing with the SEC last week, SAExploration stated that its financial statements between 2015 through 2019 “should no longer be relied upon” because they “contained errors and should be restated.” The company stated it “has retained legal counsel” but did not identify the lawyers or law firm.
Newly appointed board Chairman Michael Faust and interim CFO Kevin Hubbard said in a press statement that the company is cooperating with the SEC and that it has hired an outside accounting firm to lead its internal investigation.
On Tuesday, the first shareholder securities class-action lawsuit was filed in federal court in Houston.
“The full impact of the errors contained in the company’s financial statements and related disclosures has not yet been determined, but, based on the knowledge the company has at this time, it is reasonable to conclude that the errors will be material to the financial statements relating to the non-reliance periods,” SAExploration stated in its SEC filing.
“In light of the above, the company has determined that a material weakness exists in the company’s internal control over financial reporting and that disclosure controls and procedures were ineffective during the Non-Reliance Period,” according to the report signed by Hubbard.
SAExploration states that it offers a “full range of vertically-integrated seismic data acquisition, data processing and interpretation and logistical support services” to large independent and national oil companies in the U.S., Asia and the Middle East.
SAExploration’s board stated it fired Brent Whiteley, a 1990 graduate of the South Texas College of Law in Houston, earlier this month. Whiteley, who also received his MBA from Rice University, had been an executive at SAExploration since March 2011 and also held the title of chief financial officer.
SAExploration did not name a new or interim general counsel.
Officials at SAExploration did not respond to a request for an interview.
In its statement to the SEC, SAExploration said that long-time chairman and CEO Jeff Hastings has resigned from the board and has been placed on administrative leave, but has agreed to cooperate with the company’s internal investigation.
SEC documents show that a key issue is SAExploration’s relationship with Alaska Seismic Ventures. Records show that SAExploration has a controlling financial interest in ASV.
The shareholder lawsuit, John Bodin v. SAExploration, Jeff Hastings, Brian Beatty and Brent Whiteley, was filed by Dallas securities trial lawyer Dean Gresham of Steckler Gresham Cochran.