WASHINGTON, Sept. 28 (UPI) -- Oilfield services Weatherford International agreed to pay a penalty to settle charges it inflated its earnings reports to align with projections, the SEC said.
A tax manager and vice president in charge of taxes at Weatherford agreed to settle charges they were using deceptive accounting to better align results with expectations. Settling for $140 million, the company was forced to restate its financial statements three times in the one-year period ending 2012.
"Weatherford denied its investors accurate and reliable financial reporting by allowing two executives to choose their own numbers when the actual financial results fell short of what was previously disclosed to analysts and the public," said Andrew Ceresney, Director of the SEC's Enforcement Division
Weatherford had no public statement on the charges. Two of the officials named by the Securities and Exchange Commission -- James Hudgins and Darryl Kitay -- must pay $334,067 and $30,000, respectively, without issuing a position on the charges. Both of them are prohibited from participating in the financial reporting or audits of public companies for five years.
Last year, Weatherford closed six service facilities and 90 operating facilities in North America while at the same time completing its target of cutting payrolls by 14,000. The company, based in Switzerland with offices in Houston, reported second quarter revenue of $1.4 billion, down by almost half from last year.
Lower crude oil prices, down nearly 50 percent from two years ago, are forcing companies to trim spending on exploration and production activities, the part of the energy sector serviced by companies like Weatherford. Bernard Duroc-Danner, the company's top executive, said during the second quarter the services sector had hit bottom and the company was already hearing from its customers that new work could emerge over the coming quarters.
The SEC charged Weatherford with saying regularly that it was in a better position than it really was. The investigation into the company is ongoing.