‘Enforcement 40’ for 2020
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Join the Securities Litigation and Enforcement Group on LinkedInLuckin Coffee Agrees to Pay $180 Million Penalty to Settle Accounting Fraud Charges
The SEC’s complaint alleges that, from at least April 2019 through January 2020, Luckin intentionally fabricated more than $300 million in retail sales by using related parties to create false sales transactions through three separate purchasing schemes. According to the complaint, certain Luckin employees attempted to conceal the fraud by inflating the company’s expenses by […]
SEC Charges Super Micro and Former CFO in Connection with Widespread Accounting Violations
According to the SEC’s orders, Super Micro executives, including Hideshima, pushed employees to maximize end-of-quarter revenue, yet failed to devise and maintain sufficient internal accounting controls to accurately record revenue. As a result, the orders find, Super Micro improperly and prematurely recognized revenue, including by recognizing revenue on goods sent to warehouses but not yet […]
SEC Accounting and Auditing Enforcement Actions Down Slightly in 2019 | The D&O Diary
According to a new report from Cornerstone Research, the number of accounting and auditing enforcement actions the SEC initiated in 2019 was down slightly from the number initiated in 2018, but the number remained near the 2014-2018 average. Monetary settlements of accounting and auditing enforcement actions during 2019 totaled approximately $626 million. The June 25, […]
SEC Watching for Signs Companies May Blame Old Problems on Virus
“We’re all very aware of the challenges that companies and individuals are facing during this time with regard to financial reporting, accounting, and auditing. We’re also very much aware of the history of economic downturns and how these situations can reveal past errors or frauds,” said Matt Jacques, chief accountant for the Division of Enforcement […]
SEC Charges Trucking Executives With Accounting Fraud
The SEC’s complaint against former Celadon president and chief operating officer William Eric Meek and former chief financial officer Bobby Peavler alleges that they sought to conceal losses by engaging in a scheme to buy and sell trucks at inflated prices, in some cases double or triple their fair market value. The complaint alleges that as a result […]
SEC Charges Iconix Brand Group and Former Top Executives With Accounting Fraud
The SEC’s complaint against former Iconix CEO Neil Cole and former Chief Operating Officer Seth Horowitz alleges that Cole and Horowitz devised a fraudulent scheme to create fictitious revenue, allowing Iconix to meet or beat Wall Street analysts’ consensus estimates in the second and third quarters of 2014. According to the complaint, Cole and Horowitz […]
SEC Charges Truckload Freight Company With Accounting Fraud
In a complaint filed in federal court in Indianapolis, the SEC charged that between mid-2016 and April 2017, Celadon avoided recognizing at least $20 million in impairment charges and losses – almost two-thirds of its 2016 pre-tax income – by selling and buying used trucks at inflated prices from third parties. According to the complaint, […]
Accounting Fraud Pushes UK’s Patisserie Valerie into Insolvency
U.K. entrepreneur Luke Johnson’s efforts to save Patisserie Valerie failed as an accounting scandal pushed the bakery chain’s parent into insolvency, threatening as many as 2,800 jobs on Britain’s beleaguered shopping streets. via Accounting Fraud Pushes UK’s Patisserie Valerie into Insolvency.
SEC Charges Business Associate with Aiding and Abetting Accounting Fraud At Information Technology Company, Resolves Charges Against CFO Who Committed Underlying Accounting Fraud
According to the SEC’s complaint, Dandawate aided and abetted a fraud perpetrated by Quadrant 4 System Corp. (“QFOR”), Nandu Thondavadi, and Dhru Desai by falsely claiming in bank documents that he controlled ten entities that were, in reality, controlled by QFOR, Thondavadi, and Desai, and by allowing QFOR to use those bank accounts for various […]