Accounting & Tax

Raytheon Ex-Exec to Settle with SEC

Investigation concerns ''alleged improper disclosure and accounting in 2000 and 2001 for the deteriorating market for a line of aircraft manufactur...
Stephen TaubMarch 27, 2006

Former Raytheon Co. chairman and chief executive officer Daniel P. Burnham has agreed to settle charges by the Securities and Exchange that a unit of the company improperly accounted for losses in 2000 and 2001, according to Bloomberg.

The tentative settlement was disclosed in the proxy of First Data Corp., where Burnham is chairman of the compensation and benefits committee. The company added that since the allegations against Burnham were not related to this service with that company, his renomination to the First Data board was warranted.

At Raytheon, Burnham served as chief executive officer from December 1998 to July 2003 and chairman from August 1999 to January 2004. The SEC inquiry as it relates to Burnham, states the First Data proxy, concerns “alleged improper disclosure and accounting in 2000 and 2001 for the deteriorating market for a line of aircraft manufactured by a Raytheon subsidiary.”

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Without admitting or denying the SEC’s findings or allegations, Burnham agreed to return a portion of his cash bonus for 2000, which totaled $1.75 million, wrote Bloomberg. He reportedly also agreed to pay a civil fine and consent to entry of an administrative cease-and-desist order.

Raytheon itself — which has been under SEC scrutiny for the aircraft unit’s accounting since January 2003, noted Bloomberg — offered to settle with the commission last April and took a $12 million charge to cover the anticipated costs. That offer has not yet been approved, but Burnham’s agreement “may very well pave the way to settlement,” Paul Nisbet, an analyst with JSA Research, told the wire service.

Bloomberg also pointed out that last April, Raytheon put chief financial officer Edward Pliner on leave in connection with the investigation, and that the company expected the SEC to “bring action” against the former finance executive. David Wajsgras was named as Pliner’s replacement last month, the wire service added.