SEC Obtains Final Judgment Against Seismic Data Company

Litigation Release No. 24988 / December 18, 2020

Securities and Exchange Commission v. SAExploration Holdings, Inc., et al., No. 1:20-cv-08423 (S.D.N.Y. filed Oct. 8, 2020)

On December 17, 2020, the U.S. District Court for the Southern District of New York entered a final consent judgment against SAExploration Holdings, Inc. (SAE), a Houston-based seismic data company, in connection with SAE's involvement in an accounting fraud that falsely inflated the company's revenue by approximately $100 million.

The SEC's complaint, filed on October 8, 2020, alleges that beginning in 2015, four former SAE executives engaged in conduct that led SAE to report artificially and materially inflated revenue in connection with a purportedly unrelated customer that was in fact controlled by two of the former executives. The complaint further alleges that the former executives misappropriated millions of dollars from SAE. The SEC charged SAE and the four former executives with violating the antifraud, books and records, and internal accounting controls provisions of the federal securities laws.

Without admitting or denying the allegations, SAE consented to the entry of final judgment enjoining it from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; the reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and the books and records and internal accounting controls provisions of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. The litigation against the former executives is ongoing.

In reaching this resolution, the SEC acknowledges remedial acts undertaken by SAE and cooperation afforded the SEC from August 2019 to the present after a special committee of SAE's Board of Directors conducted an independent investigation. SAE's remediation and cooperation included removing the former executives engaged in the misconduct at issue, implementing enhancements to its internal policies and procedures, and timely providing SEC staff with facts developed during the internal investigation.

The SEC's litigation is being conducted by Nick Margida, Yael Berger, and Peter Fielding and supervised by Stephan Schlegelmilch.