Risk & Compliance

BearingPoint Subject of Formal Probe

Earlier this year the SEC requested documents concerning internal control deficiencies uncovered by the business consultancy.
Stephen TaubSeptember 7, 2005

BearingPoint Inc. announced that the Securities and Exchange Commission has elevated its informal probe to a formal order of investigation. The company, formerly KPMG Consulting, added that it believes the subject matter of the formal investigation is substantially the same as of the probe, and that it continues to cooperate.

In April, BearingPoint disclosed that the SEC staff had requested documents concerning internal control deficiencies identified on March 18, prior restatements, and other matters.

In May, Joseph Corbett resigned as chief financial officer just four months after taking the job. Chief executive officer Harry You — the former finance chief of Oracle and Accenture who had joined BearingPoint two months earlier — stepped in as interim CFO while retaining his CEO duties.

The company, which has not yet filed its financial statements for the 2004 calendar year, also announced on Wednesday that “a reasonable time frame” for completion of the process has been pushed back to the latter part of October.

BearingPoint also expects to file its first-quarter and second-quarter reports for 2005 “reasonably promptly after completion of its 2004 financial statements” but added that it will not file its third-quarter report on time.