More than a year after West Virginia-based Trans Energy was working to dispel bankruptcy rumors, the Securities and Exchange Commission (SEC) has fined the company’s former president and CEO, Loren E. Bagley, and its former vice president and CFO, William F. Woodburn, $20,000 apiece for making false and misleading statements to its investors, including statements about its Chapter 7 bankruptcy.

The SEC complaint charged that the natural gas and oil exploration, production and marketing company, under the direction of Bagley and Woodburn, issued untrue statements to the investing public through press releases, website postings and Commission filings from 1998 through 2000. The commission’s complaint said that Trans Energy issued press releases in October 2000 that contained statements that the company had $612 million worth of oil reserves,when the SEC said the company had no reasonable basis to value the potential reserves at that amount.

The SEC further alleged “that in a November 2000 posting on its website, Trans Energy inaccurately minimized the significance of the ‘going concern statement’ included in its most recent filing with the commission at a time when Trans Energy’s ability to continue as a going concern was greatly in doubt.”

The commission also claimed that the company’s December 2000 press release regarding its Chapter 7 bankruptcy, Trans Energy failed to disclose that the bankruptcy was the result of its inability to pay a $600,655 consent judgement entered earlier that year, and that a bankruptcy trustee had been appointed.

In addition, the SEC claimed the company failed to disclose the existence of material lawsuits that resulted in over $1 million in judgements against the company. As Trans Energy’s only officers, the SEC said Bagley and Woodburn knew or were reckless in not knowing that the company’s statements were false or misleading.

Trans Energy’s shares were trading at less than a penny on the over-the-counter market Friday afternoon.

In September 2001, Trans Energy appointed Robert L. Richards as the new president and CEO. Although Bagley resigned his position as CEO and president, he has become a vice president with the company. Woodburn also stepped down from his positions, but remains a director with the company.

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