SEC Charges Former Company Executive with Fraud for False Disclosures About Management
Litigation Release No. 24599 / September 17, 2019
Accounting and Auditing Release No. 4077 / September 17, 2019
Securities and Exchange Commission v. Tom Simeo, No. 1:19-cv-08621 (S.D.N.Y. filed September 17, 2019)
The Securities and Exchange Commission today announced fraud charges against Tom Simeo, the former Chairman and Chief Executive Officer of Viking Energy Group, Inc., for making materially misleading disclosures in Viking's publicly filed reports regarding Viking's purported Chief Financial Officer.
The SEC alleges that Tom Simeo, a resident of New York City, New York, created the false impression to the public that Viking had an experienced financial professional involved in its operations and financial reporting as its CFO, when in reality, the Company had no CFO. According to the complaint, between November 2014 and May 2016, Viking's public filings falsely disclosed that Guangfang "Cecile" Yang was Viking's CFO. In addition, as alleged, certain SOX certifications accompanying these filings falsely represented that Yang, as Viking's CFO, had performed an evaluation of the Company's internal controls over financial reporting and reviewed Viking's annual and quarterly reports. The SEC alleges that Simeo created the false appearance that Yang served as CFO by repeatedly affixing Yang's signature to Viking's periodic reports and SOX certifications. The SEC alleges that, aside from Yang's purported signatures on Viking's filings, there is no evidence that Yang functioned as the Company's CFO from at least November 2014 through Yang's purported resignation in July 2016.
The SEC previously filed a subpoena enforcement action against Simeo, compelling him to testify and produce, among other things, communications relating to Yang. The U.S. District Court for the District of Columbia entered an order on January 30, 2018, directing Simeo to comply with subpoenas issued to him by SEC staff in connection with its investigation.
The SEC's complaint charges Simeo with violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks a permanent injunction against future violations, a penny stock bar, and a civil monetary penalty. The SEC also seeks an order barring Simeo from serving as an officer and director of a public company.
The SEC's investigation was conducted by Laura D'Allaird and Jeffrey Anderson, and supervised by Peter Rosario, Yuri B. Zelinsky, and Antonia Chion. The SEC's litigation will be led by John Worland and Stephan Schlegelmilch.
See also: Litigation Release No. 24002 (Dec. 5, 2017); Litigation Release No. 24040 (Feb. 2, 2018)