TULSA, Oklahoma -- The founder and former CEO of SemGroup has agreed to settle a class action lawsuit.
Tom Kivisto and six other men connected to SemGroup have agreed to pay part of a $28 million settlement, according to documents filed in federal court on May 3, 2011.
Kivisto and the other individuals will pay $22.8 million. SemGroup Energy Partners, now called Blueknight Energy Partners, will turn over $5.2 million dollars' worth of stock.
The class involved in the lawsuit includes anyone who bought or held stock in SemGroup Energy Partners from July 17, 2007 through July 17, 2008.
Kivisto had co-founded SemGroup in 2001 and it became one of Tulsa's energy giants.
That changed in the summer of 2008. As the price of oil climbed well above $100 a barrel, rumors about problems with the company started to take hold on Wall Street.
They came to a head on July 17th, 2008, when shares of the company lost half of their value. The company declared bankruptcy, Kivisto was eventually fired and his energy empire was gone.
10/27/2008: Related story: SemGroup Fires Tom Kivisto
Bankruptcy proceedings revealed the personal trading company Kivisto owned had borrowed several hundred million dollars from SemGroup. Allegations of improper trading began to surface, and then Kivisto and SemGroup Energy Partners were hit with the class action lawsuit.
The suit claims statements made by SemGroup Energy Partners "regarding its internal controls, management, and stable revenues from its parent, SemGroup LP, were false and misleading because, unbeknownst to investors, SemGroup was actually engaged in risky, speculative and unauthorized trading in crude oil and other commodities."
Under the settlement agreed to on May 3, 2011, Kivisto and the six other individuals admit no wrongdoing. In fact, they maintain that all the claims against them are without merit.
The individuals listed in documents as being part of the settlement are:
SemGroup LP, meanwhile, emerged from bankruptcy in December.
SemGroup Energy Partners is now known as Blueknight Energy Partners and has a separate management team.
The settlement of the class action lawsuit will become final when federal judge Gregory Frizzell holds a hearing, which can happen no sooner than 90 days from yesterday.