SEC charges Provectus with failing to properly disclose perks for executivesStaff Writer |
Pharma Biopharmaceutical company
The Securities and Exchange Commission (SEC) charged a biopharmaceutical company with committing a series of accounting controls and disclosure violations, including the failure to properly report as compensation millions of dollars in perks provided to its then-CEO and then-CFO.
The order further finds that Provectus’ former CEO, Dr. H. Craig Dees, obtained millions of dollars from the company using limited, fabricated, or non-existent expense documentation, and that these unauthorized perks and benefits were not disclosed to investors. Provectus’ former CFO, Peter R. Culpepper, also allegedly obtained $199,194 in unauthorized and undisclosed perks and benefits.
The SEC separately charged Dees in federal district court in Knoxville, Tennessee, alleging that, while Dees was Provectus’ CEO, he treated the company “as his personal piggy bank.”
According to the complaint, Dees submitted hundreds of falsified records to Provectus to obtain $3.2 million in cash advances and reimbursements for business travel he never took.
Instead, he concealed the perks and used cash advances to pay for personal expenses such as cosmetic surgery for female friends, restaurant tips, and personal travel.
Provectus and Culpepper consented to separate orders, without admitting or denying the SEC’s findings.
They each agreed to cease-and-desist orders, and Culpepper agreed to pay $152,376 in disgorgement and interest, a civil penalty, and to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies.
The SEC’s order permits Culpepper to apply for reinstatement after three years.
The SEC’s complaint against Dees seeks an injunction, disgorgement plus interest, penalties, and an officer-and-director bar.
The SEC considered Provectus’ internal investigation regarding Dees and Culpepper, firing of Culpepper, cooperation in the staff’s investigation, as well as its implementation of new controls around reimbursement of travel and entertainment expenses, in determining to accept Provectus’ offer. ■
What to read next