Ian McCarthy was president and CEO of Beazer Homes USA, Inc., a publicly held home construction company that was required to restate its quarterly and annual financial statements due to a fraudulent earnings management scheme perpetrated by Beazer's CAO, Michael Rand, to satisfy analysts' quarterly and annual earnings expectations. Rand directed and supervised a reserve accounting scheme under which reserves for certain future homebuilding expenses were improperly established, inflated, or maintained, so that they could later be used in subsequent fiscal years, including 2006, to boost artificially income and earnings. In 2008, after uncovering the fraud, Beazer correctly restated its 2006 earnings. Even though McCarthy was not engaged in the fraud, the Securities and Exchange Commission demanded that McCarthy reimburse Beazer for cash bonuses, incentive and equity-based compensation, and profits from his sale of Beazer stock received during the 12-month period following the issuance of Beazer's quarterly and annual financial statements for its fiscal year 2006. Was the SEC's action successful?
Answer to relevant QuestionsIn 1997, Peter Zaccagnino sold to investors historical bonds-issued by railroad and foreign governments-that he claimed were high-yield secu rities. In reality, the bonds had no value to anyone other than to collectors of ...Myron Lasky was a shareholder in Kramett, Inc., a manufacturer of novelty candies. When Kramett's business declined, its board of directors chose to save the business by selling it to a larger candy company; Narron ...Sutter Ranch Corporation, an Oklahoma farming and ranching family corporation, had a provision in its articles of incorporation that provided the corporation could take action to dissolve only with the approval of 75 percent ...Joseph Crotty was a vice president of United Artists Communications, Inc. (UA), a corporation with equity securities registered under the Securities Exchange Act of 1934. Crotty was the head film buyer of UA's western ...Diversified Graphics, Ltd., hired Ernst & Whinney to assist it in obtaining a computer system to fit its data processing needs. DG had a long-standing relationship with E&W and developed great trust and reliance on E&W's ...
Post your question