⁍ The U.S. Securities and Exchange Commission fined two companies for violations that resulted in improper reporting of quarterly earnings.
⁍ Interface Inc will pay a $5 million civil fine; Fulton Financial Corp will pay a $1.5 million civil fine.
⁍ Neither admitted or denied wrongdoing.
– The US Securities and Exchange Commission has fined two companies a total of $5 million for improper reporting of quarterly earnings, Reuters reports. According to the SEC, carpet manufacturer Interface will pay a $5 million civil fine while Pennsylvania-based bank Fulton Financial will pay a $1.5 million civil fine. The SEC says Interface manually changed its accounting for management bonuses, stock-based compensation, and consulting expenses over five quarters in 2015 and 2016. It says this caused Interface’s earnings per share to meet or exceed analyst forecasts, often when internal forecasts projected they would fall short. The SEC said the changes were directed by Interface’s chief accounting officer, and sometimes also by its chief financial officer. They were also fined and no longer work for Interface. Fulton, a Lancaster, Pennsylvania-based bank serving five mid-Atlantic states, was accused of accounting improperly for mortgage servicing rights in late 2016 and early 2017. The SEC said this enabled Fulton to belatedly reverse an allowance for bad loans in the second quarter of 2017, when it otherwise would have fallen short of analyst forecasts, creating ‘an appearance of consistent earnings trends.’ In a statement, Interface said it has improved oversight and cooperated with the SEC.
Source: https://www.reuters.com/article/us-sec-eps-initiative/sec-fines-two-companies-for-improperly-reporting-earnings-first-in-eps-initiative-idUSKBN26J23C