SEC charges former CEO of Houston company with creating fictitious CFO

The Securities and Exchange Commission (SEC) has announced fraud charges against Tom Simeo. He is the former Chairman and CEO of Houston-based Viking Energy Group. The charges are for making materially misleading disclosures regarding Viking’s purported CFO.

Viking Energy is traded over-the-counter. At the time of the alleged fraud, it had a market cap of around $5 million.



Company had no CFO

The SEC alleges that Simeo, a resident of New York, created the false impression to the public that Viking had an experienced financial professional involved in its operations and financial reporting as its CFO, when in reality, the Company had no CFO.

According to the complaint, between November 2014 and May 2016, Viking’s public filings falsely disclosed that Guangfang “Cecile” Yang was Viking’s CFO.  Internal control certifications required by Sarbanes-Oxley falsely represented that Yang had performed an evaluation of Viking’s internal controls over financial reporting.

According to the SEC ‘there is no evidence that Yang performed any activities as Viking’s CFO from at least November 2014 through Yang’s resignation in July 2016. Indeed, other than a single email to Simeo from someone purporting to be “Cecile,” neither Viking nor Simeo has produced any documentary evidence that anyone from Viking, or its auditors, had ever communicated with Yang’.

Chinese Incubator 

Simeo served as Chairman of Viking from August 2008 until May 2017. Until 2014 Viking operated as an incubator for Chinese companies. Simeo’s former wife introduced him to Yang in Shanghai in 2013 and hired her as the company’s CFO shortly afterwards.

At the time she was appointed, Yang provided to Simeo a ‘standing resignation letter’ and a power of attorney in favor of Simeo, authorizing him to affix Yang’s signature to any and all documents that Yang was required to review and sign as CFO.

In 2014, Simeo converted the business to an Exploration and Production company. In 2016 he moved the head office from New York to Houston.

False Biography

Simeo provided Yang’s unverified resume to Viking’s outside counsel to use in the senior management biography disclosed in the annual report. The biography claimed that Yang had;

  • worked at KPMG from 1998 to 2006,
  • participated in audits of the Sinopec and China Mobil IPO’s,
  • a business degree from the Hult International Business School in London

According to the SEC, she didn’t work at KPMG for the years listed, she didn’t work on the IPO’s and she never graduated from the business school.

According to the annual reports, Ms Yang received no compensation over than a grant of 25,000 shares worth $3,914 in 2014.

$2 million raised from investors

During this period, the company raised approximately $2 million from investors. Viking and Simeo continued to disclose Yang as the company’s CFO until the securities had been sold.

https://www.sec.gov/litigation/litreleases/2019/lr24599.htm

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *