Two Worlds publisher SouthPeak Interactive and its chairman settled a pending investigation by the U.S. Securities and Exchange Commission, the company said Thursday.
"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.
The pending SEC investigation stems from SouthPeak's failure to properly report and record an early 2009 loan to the company from chairman Terry Philips.
In November last year, SouthPeak revealed the SEC would "bring a civil injunctive action against Mr. Phillips for abiding and abetting" SouthPeak's alleged SEC violations. SEC staff said it would recommend the SEC seek a civil penalty against Philips.
"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," Mroz said in Thursday's statement.
She said SouthPeak began cooperating with the SEC as soon as the investigation started. "In the end, however, it made the most sense for the company and Terry to negotiate an acceptable settlement that does not require us to admit any wrong-doing and close this chapter as we constantly strive to improve our processes, systems and personnel to meet our obligations as a public company," said Mroz.