WASHINGTON (Legal Newsline) — FMC Technologies will pay $2.5
million after allegations it overstated profits in one of its business
segments, the Securities and Exchange Commission (SEC) has announced.
then-executives at the company also agreed to settlements.
According to the SEC, business segment controller Jeffrey
Favret and business unit controller Steven Croft received pressure to improve
the financial performance of the energy infrastructure segment. The two
individuals allegedly proceeded to artificially reduce the value of a liability
the company recorded for employee paid time off. The individuals' actions led to
the segment logging pre-tax operating profit improvements of $800,000.
“Companies must accurately report their financial
performance without regard to internal targets. Favret and Croft
manipulated results to create the impression that the business was performing
better than reality,” said Stephanie Avakian, deputy director of the SEC’s
Division of Enforcement.
Without admitting to or denying findings, the defendants
consented to the SEC order. Favret will pay a $30,000 penalty and Croft will
pay $10,000. Both individuals cannot appear before the SEC as
accountants for at least two years.
Beth Groves and Paul Harley handled the case for the SEC, supervised by Rami Sibay.