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by Mike Caswell
The U.S. Securities and Exchange Commission has imposed a $1-million fine on TSX Venture Exchange listing Petroteq Energy Inc. and a $450,000 fine on its former president, Aleksandr Blyumkin, over improper disclosure of millions of dollars in payments, among other things. (All figures are in U.S. dollars.) The penalties stem in part from at least $3-million in money that the company paid out to people and entities connected to Mr. Blyumkin. The SEC also raises questions about the company's valuation of a project in Utah at $23.8-million.
The penalties for Petroteq and Mr. Blyumkin, 50, are contained in an administrative order that the SEC filed on Monday, June 13. In addition to the fines, the SEC has banned Mr. Blyumkin from serving as an officer or director and will hold a hearing to determine if he should disgorge any gains. The penalties represent a negotiated settlement, in which Petroteq and Mr. Blyumkin have not admitted any wrongdoing.
The case stems in part from Petroteq's acquisition on July 26, 2019, of rights to oil and gas leases in Utah. The SEC says that the problems with the deal were many. Petroteq did not disclose that the vendor was part of a group of companies linked to Mr. Blyumkin through an associate in Switzerland. As the SEC sees things, that group was a related entity, a fact that should have been disclosed to shareholders.
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