Washington (Sept. 6, 2002) -- Former Sunbeam Corp. executives Albert Dunlap and Russell Kersh each agreed to pay civil penalties and to be permanently barred from serving as officers or directors of any public company to settle charges with the Securities and Exchange Commission, the SEC said.
Dunlap, former chairman and chief executive who was once known as "Chainsaw Al" for his propensity to fire workers in an effort to boost a company’s bottom line, agreed to pay a civil penalty of $500,000. Former chief financial officer Kersh agreed to pay a civil penalty of $200,000. Neither admitted nor denied the SEC's allegations. Dunlap paid $15 million and Kersh $250,000 out of their own funds to settle a related class action, the SEC said.
According to the Commission's complaint, from 1996 until 1998 Dunlap, Kersh and other executives used earnings management tactics including cookie jar reserves, bill and hold sales, and channel stuffing to cover up the firm's true financial condition. In all, the SEC said at least $60 million of Sunbeam's reported $189 million in earnings for fiscal 1997 came from accounting fraud.
The SEC said action is still pending against three other former officers of Sunbeam, Robert J. Gluck, Donald R. Uzzi and Lee B. Griffith, and against Phillip Harlow, the audit partner on the Arthur Andersen engagements to audit Sunbeam's 1996, 1997 and 1998 year-end financial statements. Trial is scheduled for January 2003.
-- Electronic Accountant Newswire staff
