A former oil firm CEO has been charged with residing an extravagant way of life utilizing thousands and thousands of in hidden private loans he allegedly obtained from contractors and an investor.
John Schiller, former CEO of Power XXI, one of many largest oil and gasoline producers within the Gulf of Mexico. allegedly secured $7.5 million in private loans from firm distributors in trade for enterprise contracts, based on the Securities and Change Fee. He additionally allegedly received a $three million mortgage from Norman Louie, a portfolio supervisor at Power XXI’s largest shareholder, Mount Kellett Capital Administration. Louie was named to the corporate’s board simply weeks later.
The SEC says Schiller didn’t disclose any of the loans to the corporate or its traders.
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Schiller additionally allegedly charged over $1 million to his company bank card for objects that have been both private in nature or in violation of the corporate’s guidelines.
For instance, he charged $40,000 for a bottle of wine, $36,000 for a procuring spree, $18,000 for first-class journey for his household, $15,000 for a birthday celebration, $15,000 for a charitable donation to his daughter’s non-public faculty, $17,000 in private authorized charges, and $323,000 to maintain the corporate’s VIP bar stocked with liquor and cigars based on the SEC. The fees have been all paid by the corporate.
Power XXI filed for chapter in April 2016, and efficiently emerged eight months later after a monetary restructure, when Power XXI Ltd turned Power XXI Gulf Coast, Inc.
The corporate claimed in an announcement Monday that the alleged infractions occurred earlier than the chapter and restructure. It referred to as itself a brand new firm with an “solely new” administration crew and board.
“EGC will not be a celebration to the actions introduced by the SEC as we speak, and not one of the conduct in query occurred” after it got here out of chapter, the assertion learn. The corporate mentioned it has since “taken variety of actions to boost company governance,” together with in conflicts of curiosity and bills.
Schiller settled with the SEC for $180,000. As a part of the settlement, he cannot function an officer or a board member for 5 years. Schiller didn’t admit to or deny the costs.
The SEC additionally charged Louie for the undisclosed mortgage to Schiller, and Mount Kellett for its secret plan to get Louie on Power XXI’s board. They paid penalties of $100,000 and $160,000 respectively, although didn’t admit to wrongdoing.
Spokespeople for Mount Kellett Capital Administration, Louie and Schiller couldn’t be reached for remark.
CNNMoney (New York) First printed July 16, 2018: three:25 PM ET