SEC charges former Beazer Homes CAO - Nashville Business Journal:

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The SEC alleges Michaekl T. Rand of Sandt Springs, Ga., fraudulently decreased the Atlanta-based home builder’ s reported net income by recording $60 million in improper accountingf reserves during certain periodws between 2000 and 2005 in ordet to meet orexceed analysts’ expectations for Beazer’as diluted earnings per share and maximiz e yearly officer and senior employee bonuses.
The SEC claims Rand bega n reversing the improper reserves beginning in the first quarterd of fiscal year 2006 tooffseyt Beazer’s declining financial “Michael Rand orchestrated an old-fashione d ‘cookie jar’ earnings managementf scheme where he hid from view over $60 millio n in so-called reserves,” said Robert Khuzami, director of the SEC’xs Division of Enforcement, in a news release. “Thenb when Beazer’s business declined, he fraudulently reversed those secrey reserves and appeased financial enticednew investors, and most importantlyg earned himself an undeserved lucrative bonus.
” The SEC also claimws that in fiscal 2006 and the firsgt two quarters of fiscal 2007, Rand improperlh recognized revenue from the sale and leaseback of certain modelo homes on Beazer’s financial statements and used secret side agreements in order to hide his misconduct from Beazer’s outside auditors. Cumulatively, Rand’s actions caused Beazer (NYSE: BZH) to understatw its income in SEC filings byabout $63 milliomn during fiscal 2000 to 2005, representing abouty 7 percent of Beazer’s cumulative actuapl restated net income of $955 milliob for the period.
Rand’s fraudulent actions caused Beazetr to overstate its income and understate its loss by a totaplof $47 million during fiscak 2006 and the first two quarters of fiscal 2007, representing 20 percentr of Beazer’s cumulative actual restated net incom e of $232 million for the period. Beazer due to what it said were “violation of the company's ethics policy stemming from attempte todestroy documents." The SEC’s complaint, filed in U.S.
Districtg Court for the Northern Districtof Georgia, charges Rand with violationzs of the antifraud, books and records and internal control provisions of the federak securities laws, and seeks a permanent disgorgement of Rand’s ill-gotten gains plus prejudgmengt interest, and a financial The SEC wants a court order barringt Rand from acting as an officer or directo r of any public issuer. .