The Securities and Exchange Commission has reached a settlement with the former CFO of Beazer Homes USA to recover his bonus and stock sale profits from the time when the home-building company was committing accounting fraud.
Former Beazer CFO James O’Leary was not personally charged with misconduct, but is nevertheless required under the Sarbanes-Oxley Act to reimburse Beazer more than $1.4 million that he received after the Atlanta-based homebuilder filed fraudulent financial statements in fiscal year 2006. The SEC settlement is subject to the approval of a federal court in Atlanta.
Without admitting or denying the SEC’s allegations, O’Leary agreed to reimburse Beazer $1,431,022 in cash within 30 days of entry of the court order approving the settlement. The amount includes O’Leary’s entire fiscal year 2006 incentive bonus: $1,024,764 in cash incentive compensation and $131,733 previously received from Beazer in exchange for all the restricted stock units he received as additional incentive compensation for fiscal year 2006. The settlement amount also includes $274,525 in stock sale profits.
In March, the SEC reached a settlement with Beazer Homes’ then-CEO Ian McCarthy to recover over $6 million that he had received in bonus compensation and stock sale profits (see Beazer CEO Must Return $6.5M to SEC). McCarthy stepped down in June.
The company settled an SEC enforcement action in September 2008, and the SEC charged its former chief accounting officer Michael Rand in July 2009. The litigation against Rand, who allegedly perpetrated the fraud, is ongoing.
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