SEC Charges Former Pareteum Executive Chairman with Accounting Fraud

ADMINISTRATIVE PROCEEDING
File No. 3-22238

October 11, 2024 – The Securities and Exchange Commission today announced settled charges against Robert “Hal” Turner, the former Executive Chairman and Principal Executive Officer of New York-based telecommunications company Pareteum Corporation, for his role in connection with Pareteum’s accounting and disclosure fraud from 2018 through mid-2019.  During this time, Pareteum improperly overstated its revenue, and Turner negligently reviewed, signed and certified the false financial statements.

According to the SEC’s order, Pareteum executives engaged in a fraudulent scheme to improperly recognize revenue, leading to Pareteum overstating its revenue by $12 million – or 60 percent – for fiscal year 2018 and by $27 million – or 91 percent – for the first and second quarters of 2019 combined in its financial statements filed with the SEC.  Turner was aware of signs that the revenue was being improperly recognized, but he did not take reasonable steps to determine if that was the case prior to signing these filings as Pareteum’s Principal Executive Officer.  Rather, he continued to pressure his management team to achieve revenue growth that exceeded analyst expectations.  

Without admitting or denying the SEC’s findings, Turner consented to the SEC order finding that he violated the antifraud provisions of Section 17(a)(2) and (3) of the Securities Act of 1933, and Section 304 of the Sarbanes-Oxley Act of 2002 (“SOX”).  The order requires Turner to cease and desist from further violations of the charged provisions and to pay a $75,000 penalty.  The order also requires, under Section 304 of SOX, that Turner reimburse Pareteum or its successor in interest $267,118 that he received as bonus payments. 

The SEC’s investigation was conducted by Megan Ryan under the supervision of Julia C. Green of the Philadelphia Regional Office. The litigation is being handled by Karen Klotz and Judson Mihok under the supervision of Gregory R. Bockin. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the FBI.