PracticeConsultingSEC to sue ex-Sunbeam management

SEC to sue ex-Sunbeam management

Albert Dunlap, ex-chairman and CEO of kitchen appliance maker Sunbeam and its former finance chief, Russell Kersh, are two of five former employees being sued by the US Securities & Exchange Commission for alleged fraud.

In addition to Dunlap and Kersh, the SEC is also suing former controller Robert Gluck, former vice-presidents Donald Uzzi and Lee Griffith, as well as Philip Harlow, an engagement partner at Arthur Andersen LLP, who audited Sunbeam’s financial statements.

Dunlap was hired as a ‘turnaround’ specialist in July 1996, and appointed Kersh as CFO. He was fired in June 1998 after the company was forced to restate financial results for the six previous quarters, resulting in investors losing billions of dollars.

The Commission is seeking damages from all the accused and in the cases of Dunlap, Kersh, Gluck and Uzzi, it is asking for permanant bans from being directors of public companies

Richard Walker, the SEC’s director of enforcement, said: ‘This case is the latest in our ongoing fight against fraudulent earnings management practices that have caused investors billions of dollars in losses and threaten to undermine the integrity of our markets.’

Earlier this month Big Five firm Andersen agreed, out of court, to pay $110m (Pounds76m) to Sunbeam shareholders, settling a fraud lawsuit over its accounting work for the embattled appliance maker, despite a denial of wrongdoing.

Links

Andersen pays £76m in securities suit

SEC online

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