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SEC fines Fluor, execs for overstating earnings

2023-09-07 20:27 ET - Street Wire

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by Mike Caswell

The U.S. Securities and Exchange Commission has fined Fluor Corp. and several of its executives, including Alberta resident James Brittain, for an accounting scheme that resulted in the company overstating its earnings. The company recorded a $714-million charge in 2019 arising from what it called an "operational and strategic review." (All figures are in U.S. dollars.) At least some of that charge arose from improper accounting, the SEC claims.

The allegations are contained in six administrative orders that the SEC filed on Wednesday, Sept. 6, against Fluor and five current and former employees. Among those named is James Brittain, a professional engineer from Alberta who was with Fluor and Fluor Canada for 27 years. Mr. Brittain, 64, was president of the company's energy and chemicals segment until he retired in May, 2019.

The case, as set out by the SEC, arises from two large-scale, fixed-price contracts that Fluor won. In bidding on the projects, Fluor relied on overly optimistic cost and timing estimates, the SEC says. That optimism resulted in the company incurring steadily increasing cost overruns, which it did not properly report, according to the SEC.

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