UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 82185 / November 30, 2017

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.

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ORDER CONSOLIDATING FAIR 

FUNDS

ADMINISTRATIVE PROCEEDING 

File No. 3-17628

In the Matter of

Ernst & Young LLP, Craig R. 

Fronckiewicz, CPA, and Sarah E. 

Adams, CPA

Respondents.

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On September 27, 2016, the Commission issued a settled order (“Weatherford 

Order”)1against Weatherford International PLC, f/k/a Weatherford International LTD

(“Weatherford”), James Hudgins, CPA (“Hudgins”), and Darryl Kitay, CPA (“Kitay”) 

(collectively, the “Weatherford Respondents”). 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 

 

1

 See 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, Securities Act Rel. No. 10221 (Sept. 27, 2016).
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violation of U.S. Generally Accepted Accounting Principles. Weatherford issued materially 

false and misleading statements about its net income, earnings per share, effective tax rate, 

and other key financial information. Weatherford did not have sufficient internal accounting 

controls to identify and properly account for its accounting of income taxes throughout the 

relevant period. 

On October 18, 2016, the Commission issued a settled order (“Accounting Order”)2

against Ernst & Young LLP (“Ernst & Young”), Craig R. Fronckiewicz, CPA, and Sarah E. 

Adams, CPA (collectively, the “Accounting Respondents” and together, with the Weatherford 

Respondents, the “Respondents”) for their roles in the conduct described in the Weatherford 

Order while serving as the external auditor, coordinating (i.e., signing) partner, and tax partner

for Weatherford, respectively. 

As a result of the conduct described in the Weatherford Order and the Accounting 

Order (collectively, the “Orders”), the Commission found, respectively, that Weatherford 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Sections 10(b), 

13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange Act”) 

and Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; Hudgins willfully violated 

Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange Act and 

Rules 10b-5(a), 10b-5(c), (c), 13b2-1, and 13b2-2 promulgated thereunder; Kitay willfully 

violated Section 17(a) of the Securities Act and Sections 10(b) and 13(b)(5) of the Exchange 

Act and Rules 10b-5(a), 10b-5(c), and 13b2-1 promulgated thereunder; and Hudgins and 

Kitay caused Weatherford’s violations and willfully violated the federal securities laws or 

rules and regulations thereunder pursuant to Section 4C of the Exchange Act and Rule 

102(e)(1)(iii) of the Commission’s Rules of Practice; and, the Accounting Respondents

 

2

 See Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to 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, Exchange Act Rel. No. 79109 (Oct. 

18, 2016).
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engaged in improper professional conduct within the meaning of Sections 4C(a)(2) and 

4C(b)(2) of the Exchange Act and Rules 102(e)(1)(ii) and 102(e)(1)(iv)(B) of the 

Commission’s Rules of Practice and caused Weatherford’s violations of Section 13(a) of the 

Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. The Commission ordered the 

Weatherford Respondents to pay a total of $140,364,067.00 in disgorgement, prejudgment 

interest, and civil money penalties; and ordered Ernst & Young to pay a total of

$11,840,107.00 in disgorgement, prejudgment interest, and a civil money penalty. In each of 

the Orders, the Commission created a Fair Fund, pursuant to Section 308(a) of the SarbanesOxley Act of 2002, as amended, for the monies ordered.

The Respondents have paid a total of $152,204,174.00 in disgorgement, prejudgment 

interest, and civil money penalties, as ordered, into the respective Fair Funds. The Fair Funds 

are currently on deposit in interest bearing accounts at the United States Department of 

Treasury.

The Division of Enforcement recommends that the Fair Funds created pursuant to the 

Orders be consolidated into a single Fair Fund for the purposes of distributing the funds for 

the benefit of the investors harmed by the conduct described in the Orders.

Accordingly, IT IS HEREBY ORDERED that the assets of the Fair Funds created 

pursuant to the Orders, and any interest accrued on those assets, are consolidated into a single 

Fair Fund for distribution to harmed investors. 

By the Commission.

Brent J. Fields

Secretary