Gulfport, former CEO settle SEC charges over executive's personal spending

Gulfport Energy Corp. and its former CEO Michael Moore settled charges with U.S. financial regulators over findings related to unauthorized personal purchases by the top executive on the shale driller's credit card and his extensive personal use of the company's chartered aircraft.

The Securities and Exchange Commission said Feb. 24 that it determined Moore had violated anti-fraud and proxy provisions of federal security laws and caused reporting violations by Gulfport. Under the settlement, Gulfport and Moore agreed to cease-and-desist from further violations without admitting or denying the federal regulator's findings. Moore also agreed to pay an $88,248 civil penalty, according to an SEC news release.

Gulfport declined to comment.

Moore stepped down on Oct. 29, 2018, following a review by Gulfport's audit committee that found that the executive's personal use of the company aircraft totaled nearly $650,000 over the previous five years. The company review also found that Moore's personal charges to the company card, all of which were later paid back, were at times large enough — $347,164 in 2017 at the peak — to qualify as personal loans under SEC regulations and cost Gulfport $9,493 in extra interest during the 11 years Moore was with Oklahoma-based Gulfport. Gulfport reported these findings to the SEC. The SEC's orders also found that Gulfport failed to disclose paying Moore's son's landscaping company about $152,000 in 2015 for its services.

"Gulfport failed to provide accurate disclosure of executive compensation to investors who rely on this information," Melissa Hodgman, the acting director of the SEC's division of enforcement, said in a statement. "But, after discovering its disclosure failures, Gulfport's timely remediation and cooperation in our investigation were key factors in the commission's decision not to impose a penalty against the company."

The SEC noted the company's cooperation "included replacing key personnel, developing an internal audit function, enhancing existing policies and procedures, and instituting new review and tracking processes."

The shale driller, with operations in Ohio and Oklahoma, filed for Chapter 11 bankruptcy protection with its subsidiaries on Nov. 13, 2020, in the U.S. Bankruptcy Court for the Southern District of Texas (20-35562). Gulfport's Chapter 11 was part of a wave of bankruptcies in 2020 among oil and gas companies as the pandemic exacerbated their struggles with low prices and heavy debt loads.