Information and Alerts

Government Actions

SEC Obtains Final Judgments Against Former Executives for Their Roles in $100 Million Accounting Fraud

U.S. SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 26078 / August 15, 2024

ACCOUNTING AND AUDITING ENFORCEMENT NO. 4513 / August 15, 2024

Securities and Exchange Commission v. SAExploration Holdings, Inc., et al., No. 20-CV-08423 (S.D.N.Y., filed Oct. 8, 2020)

SEC Obtains Final Judgments Against Former Executives for Their Roles in $100 Million Accounting Fraud

On August 14, 2024, the U.S. District Court for the Southern District of New York entered final judgments against Brent Whiteley and Michael Scott for their roles in a multi-year accounting fraud they engaged in while they were senior executives of Houston-based seismic data company SAExploration Holdings, Inc. (SAE). The SEC’s complaint alleges that Whiteley, Scott and two other former SAE executives falsely inflated the revenue of SAE by approximately $100 million and concealed their theft of millions of dollars from the company. The SEC’s complaint further alleges that Whiteley separately stole additional company funds through a fictitious invoice scheme.

Without denying the SEC’s allegations, Whiteley consented to the entry of a final judgment permanently enjoining him from violating Section 17(a)(1) and (3) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14(a), 13b2-1, and 13b2-2 thereunder, and Section 304(a) of the Sarbanes-Oxley Act of 2002; and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 3(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The final judgment also orders Whiteley to pay $7,054,221 in disgorgement plus $1,039,382 in prejudgment interest, for a total of $8,093,603, which shall be deemed satisfied by the restitution order in the Judgment entered against Whiteley in the criminal case of United States v. Whiteley, No. 1:20-cr-534 (S.D.N.Y.). Whiteley was also ordered to reimburse SAE $1,114,303 pursuant to Section 304(a) of the Sarbanes-Oxley Act. Whiteley previously consented to the aforementioned injunctions and an officer-and-director bar, ordered by the Court on June 29, 2021, and to a suspension from appearing and practicing before the SEC as an attorney or as an accountant, ordered by the Commission on July 6, 2021.

Without denying the SEC’s allegations, Scott consented to the entry of a final judgment permanently enjoining him from violating Section 17(a)(1) and (3) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5(a) and (c) and 13b2-1 thereunder; and from aiding and abetting violations of Section 17(a) of the Securities Act and Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. The final judgment also orders Scott to pay $219,940 in disgorgement plus $41,763 in prejudgment interest, for a total of $261,703, which shall be deemed satisfied by the restitution order in the Amended Judgment entered against Scott the criminal case of United States v. Scott, No. 1:20-cr-534 (S.D.N.Y.). Scott previously consented to the aforementioned injunctions and an officer-and-director bar, ordered by the Court on June 29, 2021.

On December 17, 2020, the Court entered a final consent judgment against SAE. The Court entered final consent judgments against additional former SAE executives on April 21, 2023 and November 15, 2023.

The SEC’s case was handled by Peter Lallas, Yael Berger, Nicholas Margida, Dean M. Conway, Christopher Bruckmann, Pei Chung, and Stacy Bogert.