The SEC alleges that MHR and two senior officers former CFO Ronald Ormand and former chief accounting officer David Krueger failed to properly evaluate and apply applicable ICFR standards and improperly concluded that MHR had no material weaknesses. The SEC also charged former MHR consultant Joseph Allred, and former MHR audit engagement partner Wayne Gray, with improperly evaluating the severity of MHR internal control deficiencies and misapplying relevant standards for assessing deficiencies and material weaknesses. Accordingly, the public was not told that MHR had a material weakness in its ICFR..
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