As we point out on a relevant page of our website at the proven Houston criminal defense law firm of Hilder & Associates, P.C., the U.S. Securities and Exchange Commission has plenary powers when it comes to the oversight and investigation of alleged securities fraud-related matters.
We note, for example, on our Houston Securities Fraud Defense page that the commission “has subpoena power to broadly investigate companies, pursue prosecution, seek civil fines and work in conjunction with the Department of Justice.”
Much of that clout was readily on display recently in a matter involving the Houston-based energy company FMC Technologies. SEC officials stated last month that FMC has settled a civil probe with the commission and will now pay the hefty sum of $2.5 million in penalties related to the company’s fraudulent overstatement of profits.
Reportedly, the securities fraud centrally involved two executives — both fined and now under suspension — who were under extreme pressure to enhance the company’s financial bottom line. They allegedly did so by overstating profits after unlawfully reducing FMC’s liability for paid-off time owed company employees. That manipulation, say SEC investigators, enabled one department to report a fictitious $800,000 profit for one quarter of a recent year.
Other improprieties were cited by the SEC, as well, including the alleged improper accounting of interest-related income from loans made by FMC.
As with many such matters, FMC principals consented to the settlement terms and the SEC’s final order on the matter without either admitting or denying regulators’ findings.