Brooge Energy and Former Executives Settle SEC Fraud Complaint

 SEC‘s Allegations Against Brooge Energy and Executives

The SEC recently filed instituted proceedings against Brooge Energy Limited, and its former CEO, Nicolaas Lammert Paardenkooper, and Lina Saheb, who served as Chief Strategy Officer and Interim CEO. Brooge Energy consented to a settlement with the SEC, acknowledging violations of numerous federal securities law provisions, including antifraud and reporting requirements. The company has been penalized with a $5 million fine. Paardenkooper and Saheb also settled, agreeing to pay $100,000 each in civil penalties and accepting permanent bans from serving as officers or directors in any public companies.

Detailed Examination of Revenue Misrepresentation and Falsified Records

The SEC’s investigation uncovered that Brooge Energy reportedly misrepresented a substantial portion of its revenues – between 30 and 80 percent – in its filings with the SEC. This misrepresentation occurred during a critical period: both before and after the company’s transition to a public entity via a special purpose acquisition transaction. This issue is linked to the offer and potential sale of securities valued at up to $500 million, spanning from 2018 to early 2021.

At the core of these allegations are fabricated invoices designed to significantly inflate the revenue figures from Brooge Energy’s oil operations in Fujairah, UAE. Over a three-year period, these false invoices reportedly overstated revenues by over $70 million. The SEC’s findings suggest that Paardenkooper and Saheb were either knowingly involved in this fraudulent activity or grossly negligent about the accuracy of the company’s financial disclosures.

Brooge Energy’s Interactions with Auditors Amid SEC Scrutiny

A pivotal element of this case is Brooge Energy’s dealings with its auditing team. The company allegedly presented these fabricated invoices to its auditors, aiming to conceal the true nature of its inflated revenue figures. This act was evidently intended to deceive not only the auditors but also the investment community at large.

As the SEC investigation progressed, Brooge Energy agreed to forego the issuance of the $500 million securities initially planned. Moreover, in April 2023, the company took a corrective measure by announcing a restatement of its audited financial statements for the years 2018 to 2020.

SEC Press Release

The attorneys at Sallah Astarita & Cox, LLC are former SEC Staff Attorneys and brokerage firm counsel, with over 100 years of collective experience. If you have received a subpoena from the SEC, a document request from FINRA, or have a dispute with a brokerage firm, call 212-509-6544 for a free consultation. The firm represents investors and financial professionals nationwide.

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