Miller Energy Resources Inc.’s COO has resigned after federal accusations that the company fraudulently overstated the value of a 2009 Alaska acquisition, according to the Securities and Exchange Commission (SEC).

The SEC said Miller, a pure play Alaska operator, and its former CFO and COO inflated values of oil and gas properties, resulting in fraudulent financial reports for the company. The audit team leader at the company’s former independent auditor also was charged in the matter.

Miller responded in a news release that it thinks the SEC’s action during a 5-year-old valuation is unwarranted under the law but that management is taking the matter seriously and working with the company's board to take appropriate actions.

“The company has been in talks with the staff of the SEC regarding the matter and has cooperated in all aspects of their inquiry,” Miller said.

The SEC’s case involves the 2009 acquisition of oil and gas assets in Alaska that Miller bought for $2.25 million from Pacific Energy. The company “later reported them at a value of $480 million,” according to the SEC’s Division of Enforcement.

The overstated value boosted the company’s net income and total assets, the SEC said, and had a significant impact, turning the penny-stock company into one that eventually listed on the New York Stock Exchange, where its stock reached a 2013 high of nearly $9 per share.

The SEC accuses David M. Hall, Miller Energy’s COO since July 2013 and former CEO of Miller’s Alaska subsidiary, with understating expenses and double counting $110 million worth of fixed assets included in a reserve report.

The agency also said former CFO Paul W. Boyd “relied on a reserve report that did not reflect fair value for the assets,” the agency said in an Aug. 6 press release. Miller said that Hall resigned Aug. 5. Boyd previously left the company.

Miller Energy, Boyd and Hall are accused of violating anti-fraud provisions of U.S. securities laws and a related SEC anti-fraud rule. The SEC said Miller also violated books and recordkeeping and internal controls requirements, with Boyd and Hall in some cases “causing or aiding and abetting the alleged violations.” The SEC’s Division of Enforcement is seeking to obtain cease-and-desist orders, civil monetary penalties and return of any ill-gotten gains from the company, Boyd, and Hall.

Miller objected to the filing of the SEC complaint before an administrative law judge employed by the commission itself. The company said it will ask that the valuation case be heard in the more neutral forum of the federal courts.

Miller, which was recently delisted from the New York Stock Exchange, has been fighting rumors of bankruptcy. Carl F. Giesler, who joined the company as CEO in September 2014, recently told Hart that the company needs to refinance its debt and said the company is in the same financial situation as many other E&Ps.

“What we’re going through in Alaska is what oil and gas companies are going through” across the U.S., he said.

On Aug. 3, Miller also reported that Cook Inlet Energy LLC (CIE), a wholly owned subsidiary, entered into a release and settlement agreement dated July 22 with AIX Energy LLC to settle a lawsuit. AIX sought $1.2 million in damages under a gas sales agreement as well as interest and court costs. CIE agreed to pay to AIX $875,000 to settle the case.

Giesler said he is confident the company will be able to obtain private financing of $165 million, largely to pay debt. The loan is under review for due diligence and legal requirements.

Miller is also considering the sale of assets.