Another Example of the SEC Accounting Fraud Pursuit: Weatherford

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The SEC has announced a $140 million settlement with Weatherford International over the use of deceptive income tax accounting to inflate its earnings. Weatherford is one of the largest oil and natural gas companies internationally and is now a repeat player in settling government investigations. They were fined a few years back by the SEC for a violation of the Foreign Corrupt Practices Act.

According to the SEC order issued in the present accounting fraud case, Weatherford lowered its income tax reserves by at least $100 million a year to bring its earnings into line with analyst expectations. The company later restated its financial statements in 2011 and 2012 to reflect a proper accounting of the money.

Based on this settlement, it looks like the SEC is making an effort to police the growing number of earnings restatements for efforts to mislead investors. There have been several media reports about the problem of earnings restatements and non-GAAP accounting over the past few years.

Accounting fraud cases took a back seat during/following the Great Recession as the SEC spent resources on mortgage-backed securities and the implementation of the Dodd-Frank Act. Now, those cases appear to be back on the front burner with the SEC settling an accounting case against Monsanto a few months ago – $80 million in February 2016.

To speak to our SEC whistleblower attorneys about this case or for an evaluation of a potential submission to the SEC, please call 1-800-590-4116.