Business

Alberta Securities Commission says Poseidon executive's actions were fraudulent

CALGARY — The Alberta Securities Commission says a former officer of failed oilfield services firm Poseidon Concepts engaged in a deliberate "campaign of disinformation" in reporting U.S. contracts that led to the company overstating its revenue and accounts receivable.

The regulator says it has found Joseph Kostelecky, Calgary-based Poseidon's former senior sales executive in the United States, guilty of fraud and will proceed to a hearing later this month to determine punishment.

It says Kostelecky was called to an ASC hearing in December but refused to take part.

Poseidon was created by Calgary junior producer Open Range Energy in November 2011 to develop and market its oilfield liquid storage systems that resembled gigantic above-ground swimming pools.

The value of the new company's shares soared to $1.3 billion but fell quickly after February 2013 when it announced that it had incorrectly recorded about $100 million in revenue in the first nine months of 2012. Its assets were subsequently sold off by a court-appointed monitor for less than its secured debt, leaving nothing for shareholders.

Last year, three of Poseidon's other executives agreed in settlements to pay fines and accept trading bans after admitting they had failed to file financial statements in accordance with proper accounting principles.

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