SouthPeak Interactive, along with its chairman Terry Phillips, has satisfied the U.S. Securities and Exchange Commission enough in order for the government body to drop a pending investigation over the firm’s failure to report and record a 2009 loan given to the firm by Phillips in a clear and proper manner.
“We determined to settle the investigation in order to move forward with our business without further distraction from the investigation,” said Melanie Mroz, CEO of the publisher in a company statement. “We are fully cognizant that the need to restate our March 31, 2009 financial statements resulted from inadequate controls and procedures that have since been corrected.”
The pending SEC investigation was due to SouthPeak came to light last year in November when the firm revealed the SEC would “bring a civil injunctive action against Mr. Phillips for abiding and abetting” SouthPeak’s alleged SEC violations in which the SEC would also seek a civil penalty against Philips.
In the company statement issued yesterday, Mroz said SouthPeak was cooperative with the SEC from the start, but that in the end, “it made the most sense for the company and Terry to negotiate an acceptable settlement,” which would not require the firm to admit any wrongdoing.
It would also “close this chapter as we constantly strive to improve our processes, systems and personnel to meet our obligations as a public company,” said Mroz.