Accounting Fraud 2.0: Increased Enforcement Activity Based on Non-GAAP Metrics
Accounting fraud has long been a staple of the enforcement program at the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ), as corporate officers and employees continue to engage in efforts to improperly enhance financial results. Based on the widespread use of "non-GAAP" financial metrics by public companies and recent SEC and DOJ emphasis on such measures, we believe that non-GAAP metrics will feature prominently in the government enforcement priorities that are likely to follow the significant market correction caused by COVID-19.
In this article published by NYU Compliance & Enforcement blog, Arthur Greenspan, David Massey and James Q. Walker analyze United States v. Carroll, pending in the U.S. District Court for the Southern District of New York. This piece also discusses how companies and their senior executives risk SEC and criminal fraud charges based on misuse of non-GAAP metrics, and audit committee members risk scrutiny for failure to maintain adequate internal controls concerning non-GAAP metrics.
Click here to read the full article published on the NYU Compliance & Enforcement Blog.
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Before proceeding, please note: If you are not a current client of Perkins Coie, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Perkins Coie has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing or retaining a lawyer. An attorney-client relationship with Perkins Coie or any lawyer at Perkins Coie is not established until and unless Perkins Coie agrees to such a relationship as memorialized in a separate writing.