December 13, 2017
Perk Enforcement Case: CEO’s “Personal Piggy Bank”
– Broc Romanek
Yesterday, the SEC announced an enforcement action against Provectus for insufficient controls surrounding the reporting & disclosure of travel and entertainment expenses submitted by its executives. The former CEO swindled millions using fake or non-existent documentation – the former CFO’s take was closer to $200k.
Here’s an excerpt from the SEC’s press release:
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.
As noted in this blog by Steve Quinlivan, the company itself was not hit with a penalty – perhaps due to the board’s cooperation in the investigation. Steve notes that a somewhat similar case drew a $750k penalty from a company about 30 months ago. We’ve added this case to our list of perk enforcement actions in our “Perks” Practice Area…