SEC Settles with Ex-Officers of Sunbeam Corporation
According to the SEC's complaint, Sunbeam's ex-officers:
- Created and used "cookie-jar" reserves and recognized revenue for "bill and hold sales" that did not meet applicable accounting rules.
- Failed to disclose that the company's revenue growth was, in part, achieved at the expense of future results through a practice known as "channel stuffing."
- Misrepresented the company's performance and future prospects in a 10-Q, offering materials in connection with a bond offering, press releases, and communications with analysts.
The case  involves filings and financial reporting dating back to 1996 through 1998.
In addition to civil penalties of $500,000 and $200,000, the ex-CEO and ex-CFO also paid $1.5 million and $250,000 out of their own funds to settle a related class action. Neither of the former officers sold Sunbeam stock or received performance-based bonuses during the relevant period.