Two investors sued SandRidge Energy Wednesday, claiming the company overstated the amount of oil in its Mississippian formation holdings.
Plaintiffs James Glitz and Rodger A. Thornberry accuse the company of violating federal securities law by falsely telling shareholders that it was shifting to oil from less-profitable natural gas. However, the company's oil production remained stagnant, the lawsuit claims.
After SandRidge disclosed last month that the Mississippian formation held less oil than expected, the company's stock plummeted 9 percent in one day, according to the lawsuit, which was filed in federal court in Oklahoma City.
"(SandRidge) made false and misleading statements, and omitted material information, concerning SandRidge's oil reserves, business fundamentals and engaged in scheme to deceive the market," the lawsuit states.
In related news, hedge fund TGP-Axon, which owns 6.5 percent of SandRidge stock, continues to call for a management and board overhaul. On Thursday, the investor unveiled a web site to instruct shareholders on how to support its demands to change the board. TPG-Axon seeks to de-stagger board elections and allow directors to be removed without cause, as well as choose its own nominees.
SandRidge has not commented on the lawsuit. A SandRidge spokesman did not immediately return a message from News 9.
SandRidge shares were up $0.21 to $7.00 Friday morning.