SEC: Weatherford International oil firm to pay $140M fine

By The Associated Press

Oilfield-services company Weatherford International PLC has agreed to pay a $140 million fine to settle government claims that it used fraudulent tax accounting to inflate its earnings.

 

HOUSTON (AP) — Oilfield-services company Weatherford International PLC has agreed to pay a $140 million fine to settle government claims that it used fraudulent tax accounting to inflate its earnings.

The Securities and Exchange Commission announced the settlement Tuesday with Weatherford, which is based in Switzerland and has major operations in Houston.

According to a settlement order, Weatherford issued financial statements that inflated its earnings by more than $900 million between 2007 and 2012. The company was forced to restate financial results three times, at least partly due to a tax-accounting fraud orchestrated by two former tax executives to make the company's tax rate match estimates that had been given to analysts and investors, the SEC said.

The scheme was intended to make a Weatherford tax-reduction structure look far more successful than it was, the SEC said.

Weatherford restated previous results in 2011, which knocked $1.7 billion off the company's stock market value, and twice more in 2012.

The company and the former executives consented to the SEC order without admitting or denying the findings.

James Hudgins, the vice president of tax, resigned in 2012. He was ordered to pay $334,067 to cover a civil penalty and ill-gotten gains, according to the settlement. Darryl Kitay, a tax manager who was fired in 2013, was ordered to pay a $30,000 civil penalty.

Over the past four years Weatherford agreed to pay $173 million to settle shareholder lawsuits over the financial restatements, according to company filings.

Weatherford shares fell 5.4 percent on Tuesday but were up 11 cents to $5.32 in afternoon trading Wednesday.

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