The Securities and Exchange Commission announced the settlement of its charges against the audit partner on Sunbeam's 1996 and 1997 year-end financial statements and the company's former controller and chief accounting officer.
The former auditor from Arthur Andersen neither admitted nor denied wrongdoing. Although the SEC agreed to withdraw the fraud charges that had been lodged against him as part of a May 2001 civil lawsuit, he was still barred from practicing before the Commission as an accountant for three years. The SEC had accused him of:
- Accepting uncorroborated representations of Sunbeam's management in lieu of performing appropriate audit procedures.
- Failing to perform sufficient audit procedures and obtain sufficient information to determine whether the financial statements were in conformity with generally accepted accounting practices (GAAP). Key issues involved the company's excessive restructuring and litigation reserves at year-end 1996.
The former controller and the former vice president of sales were fined $100,000 each and barred from violating the anti-fraud, reporting, books and records, and internal controls provisions of the securities laws. The former controller was also barred from serving as an officer or director of any public company for a period of five years. The charges were settled without admitting or denying wrongdoing.
The SEC said these settlements resolve all outstanding matters in the Sunbeam litigation.