Ex-CFO of Halliburton Cleared of Charge

The former finance chief still faces trial on a Securities and Exchange Commission allegation of negligence for allowing financial statements to be...
Stephen TaubSeptember 9, 2005

A federal judge has dismissed one of two civil charges leveled by the Securities and Exchange Commission against Gary Morris, a former chief financial officer of Halliburton Co. Stemming from a time when Vice President Richard Cheney was the company’s chief executive officer, the dropped allegation held that Morris helped the company put together financial reports that failed to promptly disclose a change in accounting procedures, according to several reports.

The Houston Chronicle reported that U.S. District Judge Lee Rosenthal said that none of the charges “concern or establish Morris’ knowledge of wrongdoing.”

Morris still faces judgment on an SEC charge of negligence for allowing financial statements to be released in 1998 without full accounting disclosure, according to the paper. The trial involving that charge that is scheduled to start in May.

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Halliburton settled related charges with the SEC in August 2004. Without admitting or denying guilt, the company agreed to pay a $7.5 million penalty for not fully cooperating with the SEC’s probe.

At the time, former treasurer Robert Muchmore settled the enforcement actions by agreeing to cease and desist from committing or causing future securities law violations. He also agreed to pay $50,000.

The SEC had alleged that Morris and Muchmore were responsible for hiding a 1998 accounting change related to cost overruns that was supposed to be reported in Halliburton’s public filings. The accounting change resulted in a 46 percent overstatement of reported pretax income for 1998, according to the commission’s complaint.

The SEC also accused the duo of playing key roles in the preparation and review of quarterly earnings releases and analyst teleconference scripts that included the affected income figures.

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