FMC Technologies pays $2.5 million fine to settle charges it overstated profits
Thursday October 20, 2016
The SEC alleged that  FMC, an energy equipment maker, pressured  its energy infrastructure segment to improve financial performance. The business segment’s controller, Jeffrey Favret, and an employee who reported to him, Steve Croft, reduced the company’s costs for employee time off by $800,000, according to the SEC. Croft later switched to a new accounting system that overstated its earnings in early 2014, regulators alleged.
Companies must accurately report their financial performance,” said Stephanie Avakian, deputy director of the SEC's enforcement division, in a statement. “Favret and Croft manipulated results to create the impression that the business was performing better than reality.â€
FMC did not immediately respond to a request for comment.
Last month, oilfield services company Weatherford International agreed to pay a $140 million penalty to settle charges that it inflated its profits through deceptive accounting practices. The SEC alleged that Weatherford executives committed intentional fraud - not gross negligence - in the commission's largest case of financial fraud this year. Weatherford allegedly overstated its earnings by nearly $1 billion from 2007 to 2012 and had virtually no oversight over its tax department, according to the SEC.
Weatherford’s accounting firm, Ernst & Young, agreed to an $11.8 million fine this week for its role in the fraud.
As for FMC,  Favret and Croft settled the SEC charges without admitting or denying the allegation and  accepted $30,000 and $10,000 penalties, respectively, regulators said.  They left the company in 2014.