El Paso Settles SEC Charges of Overstated Reserves

The Securities and Exchange Commission charged Houston-based El Paso Corp., two subsidiaries and five former employees with fraud for materially overstating the company’s proved oil and natural gas reserves and misleading investors.
The five executives agreed to pay fines of between $40,000 and $75,000 to settle the charges. The Houston-based company, without confirming or denying the allegations, accepted a court injunction barring it from future violations of securities laws.
El Paso allegedly overstated its oil and natural gas reserves by 35 percent from 1999 through the first nine months of 2003, the SEC said.
The company was eventually forced to restate its financial statements for that period and reduce its earnings by $1.7 billion, the agency said.



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