In the Matter of Weatherford International PLC,
f/k/a Weatherford International LTD., et al.
Admin. Proc. File No. 3-17582
In the Matter of Ernst & Young LLP, et al.
Admin. Proc. File No. 3-17628
On September 27, 2016, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (“Weatherford Order”) against Weatherford International PLC, f/k/a Weatherford International LTD (“Weatherford”)., James Hudgins, CPA (“Hudgins”), and Darryl Kitay, CPA (“Kitay”) (collectively, the “Weatherford Respondents”). The Commission found that, between 2007 and 2012, Weatherford, a large multinational provider of oil and natural gas equipment and services, issued false financial statements that inflated its earnings by over $900 million in violation of U.S. Generally Accepted Accounting Principles. Weatherford issued materially false and misleading statements about its net income, earnings per share, effective tax rate, and other key financial information. Weatherford did not have sufficient internal accounting controls to identify and properly account for its accounting of income taxes throughout the relevant period. See the Commission’s order: Release No. 33-10221.
On October 18, 2016, the Commission instituted and simultaneously settled a related administrative and cease-and-desist proceedings (“Accounting Order”) against Ernst & Young LLP (“Ernst & Young”), Craig R. Fronckiewicz, CPA, and Sarah E. Adams, CPA (together, with the Weatherford Respondents, the “Respondents”) for their roles in the conduct described in the Weatherford Order while serving as the external auditor, coordinating (i.e., signing) partner, and tax partner for Weatherford, respectively. See the Commission’s order: Release No. 34-79109.
The Commission ordered the Weatherford Respondents to pay a total of $140,364,067.00 in disgorgement, prejudgment interest, and civil money penalties; and ordered Ernst & Young to pay a total of $11,840,107.00 in disgorgement, prejudgment interest, and civil money penalty. In each of the orders, the Commission created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, for the monies ordered.
The Respondents have paid a total of $152,204,174.00 in disgorgement, prejudgment interest, and civil money penalties, as ordered, into their respective Fair Fund.
On November 30, 2017, the Commission issued an order consolidating the two Fair Funds into a single Fair Fund (the “Fair Fund”) for distribution to harmed investors. See the Commission’s order: Release No. 34-82185.
For more information, please contact the Commission:
Office of Distributions