FMC Technologies to pay penalty for overstating profits
- Business & Finance
FMC Technologies, a Houston-based company providing subsea and surface technology to the international oil and gas market, will pay a penalty for overstating profits.
According to a statement by the Securities and Exchange Commission FMC Technologies has agreed to pay a $2.5 million penalty to settle charges that it overstated profits in one of its business segments.
Two then-executives at the company agreed to settle charges that they caused the violations to meet internal targets.
The SEC found that, after being pressured to improve the financial performance of the energy infrastructure segment at FMC Technologies, the segment’s controller Jeffrey Favret and a business unit controller Steven Croft artificially reduced the value of a liability the company recorded for employee paid time off.
The improper adjustments overstated the segment’s pre-tax operating profits by $800,000 and enabled an internal target to be met for the first quarter of 2013.
Furthermore, SEC says, without informing the company’s controller, Favret and Croft also corrected a $730,000 error recorded in 2012 that increased their segment’s operating results for first quarter 2013, yet they later signed management representation letters attesting there had been no out-of-period adjustments larger than $250,000 recorded during that period.