Raytheon Puts CFO On Leave, Offers SEC & Shareholder Settlements
Raytheon Co. announced that it placed chief financial officer Edward S. Pliner and an unnamed non-executive on leave as part of a proposed settlement with the Securities and Exchange Commission, at the same time that it announced that it had submitted a settlement offer to the Securities and Exchange Commission and settled a shareholder lawsuit.
The case stems from disclosure and accounting practices, primarily related to the company’s Raytheon Aircraft Co. commuter aircraft business, from 1997 to 2001. According to The Wall Street Journal the SEC probe appears to focus on changes in revenue recognition for its Raytheon Aircraft in January 2000. At the time, the parent company restated the unit’s revenue for 1997, 1998, and 1999 and explained that it was complying with a newly issued SEC accounting-rule clarification. Raytheon added that it offered to pay a $12 million civil penalty and to consent to the entry of a cease-and-desist order.
The company said Friday that the SEC staff recommended that the commission bring action against senior vice president and chief financial officer Edward S. Pliner and another, unnamed employee described only as a “non-executive.” Raytheon placed both individuals on administrative leave, and named vice president and controller Biggs C. Porter as acting CFO.
Meanwhile, Raytheon reached an agreement to settle a class-action securities lawsuit pending in Idaho District Court related to allegations surrounding the July 2000 sale of the company’s engineering and construction business to Washington Group International. The settlement includes a cash payment of $39 million that the company expects to make in the second quarter of 2005. Raytheon continues to deny liability, and the settlement is subject to court approval.
Sources:
Accounting Today: Raytheon Puts CFO on Leave, Makes Settlement Offers
CFO.com: Raytheon Offers Up CFO to SEC
