On September 28, 2020, the Securities and Exchange Commission (SEC) announced it had settled actions against two public companies for improperly reporting their quarterly Earnings Per Share (EPS). These actions were the first to come out of the agency’s Division of Enforcement’s “EPS Initiative.” A handful of other companies have been investigated since then due to the initiative, and there are signals that this is just the beginning. For SEC whistleblowers, the EPS Initiative and related enforcement actions shine new light on companies’ malfeasance and liability. Continue reading
We often hear about accounting fraud when a big case hits the news. For example:
- Xerox falsified its financial records for five years, inflating its earnings by $1.5 billion;
- Lehman Brothers failed to disclose an accounting loophole that reported short-term loans as sales; and
- Haliburton improperly overbooked cost overruns.