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.