SEC Charges Beazer Homes Accounting Officer with fraud
The top Accounting Officer at Beazer Homes USA, Michael Rand, has been charged with fraud and misleading company auditors by the Securities and Exchange Commission.
An SEC complaint filed in federal court, alleges that Michael T. Rand, Accounting Officer for Beazer Homes, deceived investors by fraudulently recorded improper accounting reserves during 2000 and 2005. This little creative accounting decreased Beazer's reported net income considerably.
According to Robert Khuzami, Director of the SEC's Division of Enforcement:
"Michael Rand orchestrated an old-fashioned 'cookie jar' earnings management scheme where he hid from view over $60 million in so-called reserves. Then when Beazer's business declined, he fraudulently reversed those secret reserves and appeased financial analysts, enticed new investors, and most importantly earned himself an undeserved lucrative bonus."
The SEC complaint against the Beazer Chief Accounting Officer, Michael Rand explicitly gives details on how he masterminded this Accounting scheme and profited personally. He personally sold stocks valued at $3 million and earned $1.7 million in bonuses. Was it worth it, to lose everything and risk going to jail? I guess only Mr. Rand can answer this question. I am certain that the Beazer investors are not happy about being duped by these false earnings statements. Time will tell if there were others involved in this scheme.
Brian F. LaBovick, Esq.
Esther Uria LaBovick, Esq.
Mark R. Hanson, Esq.
Joseph R. Fields Jr., Esq.
Marcie Dodson, J.D.