The investigation centers on ProPetro's financial reporting.
On August 8, 2019, ProPetro announced it could not file its 2Q 2019 Form 10-Q with the SEC. The Company disclosed that its Audit Committee had expanded an ongoing investigation. Initially, the investigation concerned the Company's disclosures concerning purchase agreements with AFGlobal for hydraulic fracturing fleets. The investigation now includes "expense reimbursements and certain transactions involving related parties or potential conflicts of interest," according to ProPetro.
The Audit Committee also announced its preliminary findings, including inadequate documentation for the Company's expense reimbursement practices to senior management, including for hundreds of thousands of dollars paid to the CEO and CFO, as well as material weaknesses in certain internal controls.
These disclosures shocked analysts, including Motley Fool, who warned its readers "to steer clear of this stock until the company files its full report with the SEC." All told, PUMP shares declined over 30%, wiping out more than $1.3 billion in market capitalization.
"We're focused on investors' losses and the extent to which management misled investors about the Company's internal controls and previously-issued financial statements," said Hagens Berman partner Reed Kathrein.
Whistleblowers: Persons with non-public information regarding ProPetro should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 510-725-3000 or email [email protected].
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