|
Former executives hit with fines, bans
Hefty penalties have been imposed on two former oil patch executives found by Alberta securities regulators to have misrepresented production and reserves volumes to security holders, analysts and the public.
In verdicts issued by the Alberta Securities Commission, Gordon Ironside, former chief executive officer of Blue Range Resources, has been permanently banned from holding any position as an officer or director of any stock-issuing company, and Robert Ruff, the former chief financial officer, faces a 10-year ban.
Ironside was also ordered to pay an administrative penalty of C$180,000 and C$675,000 towards the cost of the commission investigation, while Ruff must pay a C$50,000 penalty and C$175,000 in costs.
A hearing into the allegations started in 2002 and covered 137 days of testimony — the longest in the commission’s history.
“The penalties reflect the seriousness of the misconduct and send a message to corporate executives on the importance of issuing reliable information to the market,” the commission said.
It said the actions by Ironside and Ruff “were contrary to the most basic standards that the public expects — and that we demand — of CEOs and CFOs.”
Men ‘compromised their duty’ When it delivered its initial verdict almost a year ago, the commission said Ironside and Ruff “showed indifference to and disdain for the functioning of the capital market … (and) compromised their duty to act honestly and in good faith in favor of their own-self-interests.”
The two men were found to have: overstated Blue Range natural gas reserves by 8.9 percent by using raw numbers rather than sales gas volumes; overstated gas sales production volumes; and issued press releases claiming 30 percent increases in new production without revealing that overall production was expected to decline by 20 percent.
The actions were uncovered following a hostile takeover of Blue Range by Big Bear Exploration in late 1998.
Once it had access to Blue Range’s books, Big Bear was forced to make a C$152 million writedown of the assets, shrinking reserves by 25 percent or 20 million barrels of oil equivalent.
Ironside has already filed a notice of appeal against the securities commission’s initial ruling and has indicated he will soon submit formal information to the Alberta Court of Appeal. Ruff has not said what if any steps he plans to take.
—Gary Park
| 