SEC Settles with Ex-Officers of Sunbeam Corporation

The U.S. Securities and Exchange Commission (SEC) announced the settlement of charges against former officers of Sunbeam Corporation. The company's former CEO and CFO agreed to pay civil penalties and are permanently barred from serving as officers or directors of any public company.

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.

-Rosemary Schlank

You may like these other stories...

With tomorrow being Tax Day, you might see some procrastinators at your office filling out forms, printing out paperwork, or getting last-minute tax advice from their accountant so they can meet the IRS’s filing...
You can read volumes on how to manage an accounting practice. But if you want the quick version, just read the following four points. Everything else is just commentary.  (These points come out of the 1997 book, The...
There is a growing trend of accountants moving away from traditional compliance work to more advisory work. Client demand is there, but it is up to the accountants to capitalize on that. What should accountants' roles be...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.