The U.S. Securities and Exchange Commission charged Provectus Biopharmaceuticals Inc. with committing a series of accounting controls and disclosure violations.
According to the regulator, Tennessee-based Provectus failed to properly report millions of dollars in perks provided to former CEO H. Craig Dees and former CFO Peter Culpepper.
The commission said the biopharmaceutical company lacked sufficient controls over reporting and disclosure of travel and entertainment expenses that its executives submitted.
The SEC found that Dees obtained millions of dollars in unauthorized perks and benefits from the company using limited, fabricated, or nonexistent expense documentation, and it was not disclosed to investors. Culpepper also allegedly obtained $199,194 in unauthorized and undisclosed perks and benefits.
In addition, the SEC separately charged Dees in federal district court in Knoxville, Tenn., alleging that Provectus' former CEO used the company "as his personal piggy bank."
The complaint claims that Dees submitted falsified records to the company to get $3.2 million in cash advances and reimbursements for business travel he never took, concealed the benefits and used cash advances to pay for personal expenses.
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 complaint against Dees seeks an injunction, disgorgement plus interest, penalties and an officer-and-director bar.
