|
 ARA improperly used certain revenue adjustments called "topsides" to
boost its financial performance from 2017 through at least November
2018, the SEC alleged. In September 2019, ARA restated its
financials, showing the company had overstated its net income by
more than 30% for 2017 and more than 200% for the first three
quarters of 2018.
Two of ARA's former chief financial officers, Jonathan Wilcox and
Jason Boucher, and its former controller Karen Smith were also
charged for their misconduct relating to the scheme, SEC said. The
defendants misled their auditors in an attempt to prevent discovery
of the improper accounting practices, the SEC said.
The SEC charged the defendants with violations of antifraud,
accounting controls and books and records provisions of U.S.
securities laws, according to the complaint filed in federal court
in New York.
ARA, which did not admit or deny the findings, agreed to settle the
lawsuit by paying a $2 million civil penalty. A company spokesperson
said ARA is "committed to strong internal financial controls and
compliance efforts".
[to top of second column] |
 The SEC said it is seeking
civil penalties and industry bars for all three
executives and is trying to claw back
incentive-based compensation from the former
chief financial officers. Reuters previously
reported
https://www.reuters.com/legal/litigation/
corporate-crackdown-us-sec-takes-aim-executive-pay-2021-10-22
the agency was looking to utilize this
infrequently-used power.
Matthew Kane, an attorney for Wilcox, said in an
email: "We disagree with the allegations set
forth in the SEC's complaint and we look forward
to vigorously litigating these issues."
Attorneys for the two other executives did not
respond immediately to requests for comment.
(Additional Reporting Jonathan Stempel in New
YorkReporting by Chris Prentice; Editing by
Aurora Ellis)
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