Investigation of ProPetro Holding Corp.
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ProPetro Holding Corp. (PUMP) Reveals Multiple Weaknesses in Financial Reporting
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between March 17, 2017 and August 8, 2019, on March 27, 2018, ProPetro filed its annual report for fiscal year 2017 touting revenue of $981.86 million and stating in relevant part that the Company had concluded that its disclosure controls and procedures “were effective at the reasonable assurance level.” In its annual report on 10-K for fiscal year 2018, ProPetro touted increasing revenue of $1.7 billion and maintained its statement on its disclosure controls and procedures. Then, in August 2019, the Company had disclosed that it was conducting an audit concerning, amongst other things, expense reimbursements and certain transactions involving related parties or potential conflicts of interest and that $370,000 had been improperly reimbursed to members of senior management. In addition to the Company’s internal audit, ProPetro remains under investigation by the SEC. On this news, ProPetro’s share price fell $4.59, or over 26%, to close at $12.75. Finally, on February 24, 2020, ProPetro revealed that a board committee had found multiple material weaknesses related to its financial reporting and disclosures and consequently the Company announced it was unable to timely file its annual report.