Statement Summary
The SEC approved the payment of fees and expenses to the Fund Administrator for managing a Fair Fund established following enforcement proceedings against Weatherford International PLC and Ernst & Young LLP. The Weatherford Order revealed that between 2007 and 2012, Weatherford inflated earnings by over $900 million, resulting in required restatements of its financial statements. The E&Y Order found the auditing firm engaged in improper conduct during its financial oversight of Weatherford.
In total, $152,204,174 has been allocated for distribution to harmed investors due to these violations. The Fund Administrator, Epiq Class Action and Claims Solutions, Inc., submitted invoices totaling $884,248.79 for services rendered from July 2020 to June 2024, which have been authorized for payment to ensure proper management of the Fair Fund.
Original Statement
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 103022 / May 9, 2025
ADMINISTRATIVE PROCEEDING
File No. 3-17582
In the Matter of
Weatherford International PLC,
f/k/a Weatherford International
LTD., James Hudgins, CPA, and
Darryl Kitay, CPA
Respondents.
ORDER APPROVING APPLICATION OF FUND ADMINISTRATOR FOR PAYMENT OF FEES AND EXPENSES AND AUTHORIZING THE APPROVAL AND PAYMENT OF THE FEES AND EXPENSES OF ADMINISTRATION
ADMINISTRATIVE PROCEEDING
File No. 3-17628
In the Matter of
Ernst & Young LLP, Craig R.
Fronckiewicz, CPA, and Sarah. E.
Adams, CPA
Respondents.
On September 27, 2016, the Commission issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings pursuant to Section 8A of the Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934, and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Weatherford Order”) against Weatherford International PLC, f/k/a Weatherford International LTD. The Commission found that, between 2007 and 2012, Weatherford, a large multinational provider of oil and natural gas equipment and services, issued false financial statements that inflated its earnings by over $900 million in violation of Generally Accepted Accounting Principles (GAAP).
As a result, Weatherford was forced to restate its financial statements on March 8, 2011, and again in February and July 2012. As a result of the conduct described in the Weatherford Order, the Commission ordered the Weatherford Respondents to pay a total of $140,364,067 in disgorgement, prejudgment interest, and civil money penalties. Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, the Weatherford Order created a Fair Fund for distribution of the amounts ordered to harmed investors.
On October 18, 2016, the Commission issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings against Ernst & Young LLP, Craig R. Fronckiewicz, CPA, and Sarah E. Adams, CPA. According to the E&Y Order, the E&Y Respondents violated the federal securities laws and engaged in improper professional conduct while serving as the external auditor for Weatherford. As a result of this conduct, the Commission ordered the E&Y Respondents to pay a total of $11,840,107 in disgorgement, prejudgment interest, and civil money penalties to the Commission, and created a Fair Fund, pursuant to Section 308(a) of Sarbanes-Oxley.
On November 30, 2017, the Commission issued an Order consolidating the Weatherford and Ernst & Young Fair Funds into a single Fair Fund for distribution to harmed investors, for a total Fair Fund in the amount of $152,204,174. The Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to the Fair Fund.
On July 16, 2020, the Division of Enforcement issued an order appointing Epiq Class Action and Claims Solutions, Inc. as the fund administrator of the Fair Fund and set the administrator’s bond amount.
In accordance with Rule 1105(d) of the Commission’s Rules, the Fund Administrator has submitted to the Commission staff two invoices for services rendered totaling $884,248.79. The Commission staff has requested that the Commission authorize the Office of Financial Management to pay the Fund Administrator’s fees and expenses.
Additionally, to expedite and streamline future payments, the Commission staff has requested that any fees and expenses of the Fund Administrator from the Fair Fund be paid at the direction of the Assistant Director of the Office of Distributions, as long as the total amount does not exceed the approved cost proposal.
Accordingly, it is hereby ORDERED that Office of Financial Management pay the Fund Administrator’s fees and expenses of $884,248.79 from the Fair Fund.
