SEC Charges Roadrunner Transportation Systems, Inc. with Accounting Fraud

The Securities and Exchange Commission today announced settled charges against Roadrunner Transportation Systems, Inc. for engaging in a multi-year accounting fraud scheme from at least July 2013 through January 2017. Roadrunner is a shipping and logistics company based in Downers Grove, Illinois.

According to the SEC’s order, Roadrunner manipulated its financial reports to hit prior earnings guidance and analyst projections. The order finds that, among other things, Roadrunner hid incurred expenses by improperly deferring them and spreading them over multiple quarters to minimize their impact on Roadrunner’s net earnings and avoided writing down assets that were worthless and receivables that were uncollectable.  The SEC’s order also finds that Roadrunner manipulated earnout liabilities related to the company’s acquisitions which created an income “cushion” that could be used in future quarters to offset expenses. According to the order, Roadrunner concealed its fraud from Roadrunner’s independent auditor. The order finds that, as a result of this conduct, Roadrunner materially misstated its financial results in its earnings releases, earnings calls, and quarterly and annual reports from at least the second quarter of 2013 through the third quarter of 2016.

Source: SEC Charges Roadrunner Transportation Systems, Inc. with Accounting Fraud