Mark Frissora, the former CEO and chairman of Hertz, must repay nearly $2m to the popular United States car rental company to settle charges of filing inaccurate financial statements and disclosures. In response to his alleged actions, the Securities and Exchange Commission (SEC) charged Frissora with aiding and abetting Hertz in a series of accounting violations.
Specifically, the SEC has alleged that Frissora, in response to Hertz’s poor financial results in 2013, pressured his subordinates to make accounting changes that rendered the company’s financial reports materially inaccurate.
The SEC also claims that Frissora forced the company to keep rental cars in its fleet for longer periods in order to lower its depreciation expenses. According to the SEC, none of this was properly disclosed, and it passed the risk of using older vehicles onto investors.
Finally, the SEC alleges that Frissora allowed Hertz to reaffirm its earnings guidance in 2013 despite internal calculations that projected lower earnings. Hertz revised these financial results in 2014 and restated them in 2015, resulting in a reduction of previously reported pretax income by approximately $235 million.
In consenting to a judgment that permanently enjoined him from aiding and abetting any future violations of federal securities law, Frissora neither admitted nor denied the allegations. The judgment requires Frissora to reimburse Hertz for nearly $2 million in bonus and other incentive-based pay. In addition, Frissora is required to pay a $200,000 civil penalty.
Reporting Accounting Fraud
Anyone who has evidence of a company or individual’s accounting fraud may be eligible to participate in the SEC whistleblower program. The SEC whistleblower program rewards whistleblowers handsomely for the information they provide to the SEC. In order to qualify for compensation under the program, an individual must meet the following conditions:
- Have original information about accounting fraud that isn’t yet public. If the SEC already has the information, or the information is publicly available, the whistleblower isn’t eligible for a reward.
- Voluntarily provide the information to the SEC. If the information provided is due to a subpoena, court order, or investigation, the whistleblower isn’t eligible for a reward.
- The information must lead to a successful enforcement action. In addition, the judgment must exceed $1 million.
Contact Our SEC Whistleblower Attorney Today
Accounting fraud hurts investors and harms the nation’s financial markets. In order to fight accounting fraud, the SEC offers significant financial rewards to whistleblowers who report it. If you have information about accounting fraud, you need an experienced SEC whistleblower attorney on your side. At Jeff Newman Law, we understand how brave one must be to blow the whistle on accounting fraud. Therefore, when we take on your case, we’ll do everything in our power to ensure that you obtain the compensation you deserve for your sacrifice. Please contact us today to schedule a consultation.