The SEC has its claws out for executives who play fast and loose with the numbers.
Two executives at truckmaker Navistar
will pay the company $2.3 million in a settlement of Securities and Exchange Commission accounting chicanery charges. It is the agency’s second big clawback case this year.
CEO Daniel Ustian (right) will hand over $1.3 million in stock and former finance chief Robert Lannert will give Navistar $1 million in cash under the agreement, which settles a case dating back to 2001. They agreed to return those sums under a provision of Sarbanes Oxley that obliges executives to repay bonuses when earnings turn out to have been misstated.
The SEC said the company overstated its pretax profits by $137 million over a five-year period through 2005. The agency said Ustian and Lannert were the “causes” of Navistar’s internal control violations. Neither the company nor the executives admitted or denied any wrongdoing.
In 2007, the company restated its earnings to fix the accounting problems, which centered on vendor rebates and warranty costs.
The SEC is trying to claw back $4 million from Maynard Jenkins, the former CEO of auto parts maker CSK. In June he lost a bid to have that case thrown out of court.