The SEC barred and fined a public company Chief Accounting Officer for approving undisclosed expense reimbursements for the company’s CEO. The CEO ultimately repaid the $11.285 worth of perquisites incurred over a 5-year period for personal items such as private aircraft usage, cosmetic surgery, cash for tips, medical expenses, charitable donations, and personal travel expenses. The SEC asserts that the CAO approved the expenses in violation of company policy and without appropriate backup documentation and then failed to disclose the reimbursements in the company proxy statements. The SEC charges the CAO with causing the company to file false reports.
OUR TAKE: We wrote on Friday that the SEC is looking to hold financial executives accountable. In this case, the SEC doesn’t even allege that the CAO derived any personal benefit by approving his boss’s expenses. Regardless, the SEC holds him accountable for allowing wrongdoing to occur.