The former chief executive officer of Hertz, Mark Frissora, has agreed to pay $2.18 million to settle charges from the U.S. Securities and Exchange Commission that he aided and abetted the company’s filing of inaccurate financial statements and disclosures.
In a statement, the SEC said Frissora pressured subordinates to “find money” that made the company’s financial reports materially inaccurate, artificially lowered depreciation costs without properly disclosing risks, and approved the company’s decision to reaffirm earnings guidance in November 2013, despite internal calculations that projected lower figures.
“Investors are entitled to accurate and reliable disclosures of material information about a company’s financial condition,” Marc Berger, director of the SEC’s New York Regional Office, said. “We are committed to holding corporate executives accountable when their actions deprive investors of such information.”
Frissora agreed to pay a $200,000 civil fine to the SEC and to repay $1.98 million in incentive-based compensation to Hertz, according to settlement papers filed in federal court in Newark, New Jersey.
He neither admitted nor denied wrongdoing.
Hertz revised its financial results in 2014 and restated them in July 2015, reducing its previously reported pretax income by $235 million, the SEC said.
Last year, Hertz agreed to pay $16 million to settle with the SEC over the financial reporting failures. In March 2019, the company sued Frissora, former chief financial officer Elyse Douglas, and former General Counsel Jeffrey Zimmerman seeking to recoup approximately $70 million in incentive compensation they received as a result of inflated income reported for its 2011, 2012, and 2013 fiscal years.
The company also cited the “lengthy and costly” SEC investigation and asked the court to assess the former executives for damages caused by the violations.
Frissora left the company in 2014 under pressure from activist investors.
Hertz filed for bankruptcy protection this May, citing the COVID-19 pandemic.
The settlement requires a judge’s approval.
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