WASHINGTON (Legal Newsline) — The Securities and Exchange Commission (SEC) announced Jan. 11 that L3 Technologies Inc., a contactor for U.S. and various foreign government agencies, will pay $1.6 million after allegations of failing to maintain proper books and records.
According to the SEC, L3’s Army Sustainment Division (ASD) improperly recorded $17.9 million in revenue from a contract with the U.S. Army. The SEC argued that the company used invoices associated with unresolved claims against the U.S. Army. These invoices had not been delivered when the revenue was recorded.
“Adequate internal accounting controls function as a critical safeguard against the type of improper revenue recognition that occurred at L3,” said Andrew M. Calamari, director of the SEC’s New York Regional Office. “L3 failed to have such controls in place, which rendered inaccurate its books and records.”
L3 did not admit or deny liability but agreed to pay $1.6 million in penalties as well as to consent to an SEC cease-and-desist order.
H. Gregory Baker, David Oliwenstein, Christopher Mele, and Steven G. Rawlings of the New York Office are handling the case for the SEC, under the supervision of Sanjay Wadhwa.