FraudNews
03-06-2011, 12:20 PM
Ian J. McCarthy, Beazer Homes chief executive officer (CEO), made an agreement to return the amount of $6.5 million, the compensation that he received while accusations of accounting fraud were faced by the company, according to the U.S Securities and Exchange Commission (SEC).
Beazer had not been reimbursed by fifty-eight-year-old McCarthy for bonuses and other payments, that are based on incentives, within the 12 months after a 2006 fraudulent financial statements were filed by the company, the SEC stated. McCarthy's settlement, which includes a profit worth $772,232 that he got from stock sales and over 78,000 restricted stock shares, depict his entire bonus for 2006, the commission cited.
The SEC was given the authority by the Sarbanes-Oxley Act of 2002, an anti-fraud law, to seize profits earned from stock sales and bonuses from finance chiefs and chief executives of firms that recapitulate earnings due to misconduct, albeit, they had no involvement in the offenses. The commission has such power in the so-called "clawback."
Robert Khuzami, enforcement director of SEC, mentioned that the “clawback” authority of the commission offers a significant incentive to force senior executives to be more cautious in avoiding misconduct and assuring the compliance of companies with requirements for financial reports.
McCarthy, who was not personally charged by the SEC with any engagement in the misconduct, made a settlement with the SEC without accepting or arguing any misconduct.
Atlanta-based Beazer, one of the biggest homebuilders in the U.S., was compelled to restate its financial results for the 2006 fiscal year that ended September 30, after it was accused by the commission of forging land development and containing cost-to-complete accounts. It was also alleged of inappropriately recording some home-financing transactions. Charges of criminal fraud conspiracy were filed by federal prosecutors against Beazer in July of 2009. In a delayed agreement with the prosecution, the homebuilder agreed to pay a restitution worth up to $50 million.
Beazer had not been reimbursed by fifty-eight-year-old McCarthy for bonuses and other payments, that are based on incentives, within the 12 months after a 2006 fraudulent financial statements were filed by the company, the SEC stated. McCarthy's settlement, which includes a profit worth $772,232 that he got from stock sales and over 78,000 restricted stock shares, depict his entire bonus for 2006, the commission cited.
The SEC was given the authority by the Sarbanes-Oxley Act of 2002, an anti-fraud law, to seize profits earned from stock sales and bonuses from finance chiefs and chief executives of firms that recapitulate earnings due to misconduct, albeit, they had no involvement in the offenses. The commission has such power in the so-called "clawback."
Robert Khuzami, enforcement director of SEC, mentioned that the “clawback” authority of the commission offers a significant incentive to force senior executives to be more cautious in avoiding misconduct and assuring the compliance of companies with requirements for financial reports.
McCarthy, who was not personally charged by the SEC with any engagement in the misconduct, made a settlement with the SEC without accepting or arguing any misconduct.
Atlanta-based Beazer, one of the biggest homebuilders in the U.S., was compelled to restate its financial results for the 2006 fiscal year that ended September 30, after it was accused by the commission of forging land development and containing cost-to-complete accounts. It was also alleged of inappropriately recording some home-financing transactions. Charges of criminal fraud conspiracy were filed by federal prosecutors against Beazer in July of 2009. In a delayed agreement with the prosecution, the homebuilder agreed to pay a restitution worth up to $50 million.