Symmetry Medical Inc.’s former CEO will return $450,000 in pay and stock proceeds to resolve U.S. Securities and Exchange Commission claims that he profited from accounting fraud by a United Kingdom unit.
Brian S. Moore benefited from a scheme in which employees inflated financial results in 2005 and 2006 “by systematically understating expenses and overstating assets and revenues” at Symmetry’s Thornton Precision Components Ltd. subsidiary, the SEC said in a complaint filed Monday in federal court in South Bend. The agency also settled claims against Symmetry Chief Financial Officer Fred L. Hite, who will pay $210,000.
“Symmetry shareholders were investing their money -- and Symmetry and TPC executives were collecting their bonuses -- based in part on inflated numbers,” said Stephen L. Cohen, associate director of the SEC’s Division of Enforcement.
The SEC recovered compensation from Moore and Hite under a provision in the Sarbanes-Oxley Act that gives the agency authority to seize payouts to CEOs and CFOs at companies that restate earnings “as a result of misconduct.” The law doesn’t specify whether the executives must be involved in wrongdoing.
“It is important to emphasize that the SEC did not accuse Mr. Moore of any wrongdoing,” Russell G. Ryan, an attorney for Moore at King & Spaulding LLP, said in an e-mail statement. “He is glad to have put the matter behind him.” A lawyer for Hite didn’t respond to a request for comment.
Moore and Hite resolved the SEC claims without admitting or denying wrongdoing.
Symmetry, a Warsaw-based firm that designs, develops and manufactures surgical instruments, discovered “accounting irregularities” in 2007 and has “cooperated with the SEC since then,” president and CEO Thomas J. Sullivan said. The company wasn’t sanctioned.
Congress passed Sarbanes-Oxley in 2002 to combat corporate fraud after accounting scandals at Enron Corp. and WorldCom Inc. eroded investor confidence.