(HedgeCo.Net) The Securities and Exchange Commission today charged a biopharmaceutical company with committing a series of accounting controls and disclosure violations, including the failure to properly report as compensation millions of dollars in perks provided to its then-CEO and then-CFO.<\/p>\n
According to the SEC, Tennessee-based Provectus lacked sufficient controls surrounding the reporting and disclosure of travel and entertainment expenses submitted by its executives. The order further finds that Provectus\u2019 former CEO, Dr. H. Craig Dees, obtained millions of dollars from the company using limited, fabricated, or non-existent expense documentation, and that these unauthorized perks and benefits were not disclosed to investors. Provectus\u2019 former CFO, Peter R. Culpepper, also allegedly obtained $199,194 in unauthorized and undisclosed perks and benefits.<\/p>\n
The SEC separately charged Dees in federal district court in Knoxville, Tennessee, alleging that, while Dees was Provectus\u2019 CEO, he treated the company \u201cas his personal piggy bank.\u201d According to the complaint, Dees submitted hundreds of falsified records to Provectus to obtain $3.2 million in cash advances and reimbursements for business travel he never took. Instead, he concealed the perks and used cash advances to pay for personal expenses such as cosmetic surgery for female friends, restaurant tips, and personal travel.<\/p>\n
\u201cReimbursement of travel and entertainment expenses, and other perks paid to executives, can be material information, and companies must ensure that the perks they pay for executives are properly recorded and disclosed in public filings,\u201d said Stephanie Avakian, Co-Director of the SEC\u2019s Enforcement Division. \u201cProvectus failed to give its shareholders all of the relevant information about how its top executives were being compensated by the company.\u201d<\/p>\n
\u201cThe SEC\u2019s settlement with Provectus \u2013 which does not include any penalty \u2013 takes into account the proactive remediation and cooperation by the company\u2019s new leadership. Provectus fired wrongdoers, took other steps to remedy its controls, and provided SEC staff with critical information regarding its former executives\u2019 expense reimbursement abuses,\u201d said Steven Peikin, Co-Director of the SEC\u2019s Enforcement Division.<\/p>\n
Provectus and Culpepper consented to separate orders, without admitting or denying the SEC\u2019s findings. They each agreed to cease-and-desist orders, and Culpepper agreed to pay $152,376 in disgorgement and interest, a civil penalty, and to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC\u2019s order permits Culpepper to apply for reinstatement after three years. The SEC\u2019s complaint against Dees seeks an injunction, disgorgement plus interest, penalties, and an officer-and-director bar. The SEC considered Provectus\u2019 internal investigation regarding Dees and Culpepper, firing of Culpepper, cooperation in the staff\u2019s investigation, as well as its implementation of new controls around reimbursement of travel and entertainment expenses, in determining to accept Provectus\u2019 offer.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today charged a biopharmaceutical company with committing a series of accounting controls and disclosure violations, including the failure to properly report as compensation millions of dollars in perks provided to its then-CEO and then-CFO. […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-61340","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61340","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=61340"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61340\/revisions"}],"predecessor-version":[{"id":61341,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/61340\/revisions\/61341"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=61340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=61340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=61340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}