FACTS about Public Roofing Procurement, and Oversight. Copyright 2010 by Robert R. Solomon

Wednesday, September 14, 2016

RPM (Tremco) Facing SEC Fraud Case.

Thank you to the wonderful people at Durability + Des8ign.
http://www.durabilityanddesign.com/news/?fuseaction=view&id=15485

Note the SEC is demanding a jury trial.  
This is going to get ugly, and not long after the DOJ fined them $61,000,000.00 for abusing GSA contracts.  If Tremco fell of the earth's surface tomorrow, nobody would miss them.

Purchasing Cooperatives who enable them are just as responsible, and I hope they get a good "Wut Fer" as well.




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RPM Faces SEC Fraud Case

Wednesday, September 14, 2016

More items for Building Envelope
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The U.S. Securities and Exchange Commission has charged RPM International Inc. and its general counsel with disclosure and accounting fraud stemming from a Department of Justice investigation regarding roofing materials and services provided to the government.
According to the agency’s statement, RPM and Edward W. Moore, 59, “failed to disclose a material loss contingency, or record an accrual for, a government investigation when required to do so under governing accounting principles and securities laws.”
Meanwhile, RPM leaders say the allegations are without merit.
Tremco Case
The SEC’s complaint, filed Friday (Sept. 9), says that from 2011 through 2013, RPM and its subsidiary Tremco Inc.—a manufacturer of roofing materials, construction sealants and waterproofing systems—were under investigation by the DOJ for overcharging the government on certain contracts.
RPM settled the DOJ investigation and litigation for $65.1 million in August 2013.
accounting
© iStock.com / Sky_Blue
The SEC announced it had lodged a disclosure and accounting fraud case against RPM International for failing to disclose a loss contingency or record an accrual for an investigation by the Department of Justice.
As RPM's general counsel and chief compliance officer, Moore allegedly oversaw RPM's response to the DOJ investigation, the SEC said. However, Moore did not inform RPM's CEO, CFO, Audit Committee, and independent auditors, of material facts about the investigation, the complaint alleges.
For example, Moore reportedly “knew but failed to inform” RPM executives that:
  • RPM sent DOJ estimates showing RPM's subsidiary overcharged the government on the contracts under investigation by a material amount;
  • RPM agreed to submit a settlement offer by a specific date to resolve the DOJ investigation; and
  • Prior to submitting the settlement offer to DOJ, RPM's overcharge estimates increased substantially to at least $28 million.
Misleading Documents
The SEC alleges that RPM filed multiple false and misleading documents with the SEC because of Moore’s actions. For example, RPM allegedly failed to disclose in its SEC filings:
  • Any loss contingency related to the DOJ investigation, or to record an accrual on its books, when required to do so by governing accounting principles and the securities laws; and  
  • A material weakness in its internal control over financial reporting and its disclosure controls when in fact such weakness existed.
“Because of RPM’s false and misleading SEC filings, investors were not timely informed that a material loss relating to the DOJ investigation was reasonably possible or probable,” the complaint states. “Investors also were not timely notified of a material weakness in RPM’s internal control over financial reporting and its disclosure controls.”
In August 2014, RPM did restate its financial results for three quarters that occurred during the DOJ investigation and filed amended SEC filings for those quarters, disclosing the DOJ investigation and related accruals, the commission said in its announcement. In the restated filings, RPM also disclosed errors relating to the timing of its disclosure and accrual for the DOJ investigation.
RPM
RPM International
The DOJ investigation in question occurred between 2011 through 2013, when RPM and one of its subsidiaries—roofing materials, construction sealants and waterproofing systems company Tremco Inc.—were under scrutiny for overcharging the government on certain contracts.
“RPM’s restatement thus confirmed that the company’s original SEC filings referenced above were materially false and misleading,” the complaint notes.
Rules Cited
The SEC's complaint charges RPM with violating specific antifraud provisions of the federal securities laws of the Securities Act of 1933; reporting provisions of the federal securities laws of the Securities Exchange Act of 1934 and rules thereunder; and the books and records and internal controls provisions of the federal securities laws of the Exchange Act.
The complaint also charges Moore with violating certain sections of the Securities Act and rules under the Exchange Act.
The complaint seeks permanent injunctions, repayment of “ill-gotten gains” plus interest and penalties.
RPM’s Response
In response to the enforcement action, RPM’s CEO, Frank C. Sullivan, issued a statement Friday asserting that “the restatements had no impact on the audited results for the fiscal year ended May 31, 2013, and the company's audit committee concluded that there was no intentional misconduct on the part of any of its officers.”
Sullivan added: "We believe the allegations have absolutely no merit and are the product of prosecutorial overreach. We intend to vigorously defend ourselves and expect our position to be vindicated in court."
Further, RPM filed a Form 8-K with the SEC on Friday, stating that the company has “cooperated with the SEC’s investigation and believes the allegations mischaracterize both the company’s and Mr. Moore’s actions in connection with the matters related to the company’s quarterly results in fiscal 2013 are without merit.”
The filing also noted its confidence in Moore’s integrity and conduct.
RPM International is the parent company of Carboline, Tremco and dozens of other coating, sealant and chemical brands. The company is based in Medina, OH.
The SEC has demanded a jury trial.
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Reject negativity in all forms, and always remember to keep looking "UP".
Respect.

Ron

Thursday, September 1, 2016

AEPA Purchasing Cooperative and RCI.

Friends:

This is another example of a fake "Line Item' bid scheme.   Fill out 55 pages of "Line Items", just so they can pick a single favorable line item for their "Preferred Vendor".

Let me make a prediction:  AEPA will choose one of the following:  Tremco, or Garland.  They're the only ones who perpetrate in such heinous abuse of taxpayers.

I want RCI to "Stand Up", and tell AEPA :  NO LINE ITEM BIDDING.  No estimator in this country (or anywhere else) can determine the price of a roof from a "list".  There are just too many variables in figuring these projects, and NO LIST on earth can produce a hard bid.  Can't do it.

What their "list" says is the exact opposite of how any roofing professional estimates are done.

AEPA Pre-bid Conference Call
Registration - Today
During its ongoing effort to track activities related to the use of cooperative purchasing in public school systems re-roofing projects, RCI has been made aware of the Association of Educational Purchasing Agencies (AEPA) solicitation below.
Good afternoon,  the AEPA is soliciting bids for the a national contract (20 states) for roofing and building envelope services, which includes materials, restoration and installation.   Tomorrow is the first deadline for submittal of registration for a conference call that will be held on September 7, 2016 at 1:00 Eastern time.   The registration to participate in the conference call must be submitted by tomorrow before 3:00 PM.
Also included on this e-mail is the pricing spreadsheet (see supplemental information below) that shows how the points are allotted for various parts of contract offer. There are a total of 10 forms that need to be submitted for the bid.  These forms are on the Public Purchase website. You have to register on the website to access the bid solicitation.
The bids are due October 5th and will be publicly opened at a school in Michigan.
Supplemental Information:
This information is intended for any RCI Consultant  member who may have an interest in learning more about this activity. We realize the time is short for anyone to register to participate in the teleconference, but we just learned of this notice. If you decide to register to  participate in the teleconference, we would appreciate notification for our records only. 


http://r20.rs6.net/tn.jsp?f=001OuukHnZiLz5s68dcfVshuxP_Ey3FL0TnDhL4NGCnimFh6LvzIsJyGxtdMSTFoo-46322d8NUsTLssUhv-4PKLdJJCGNbmY-paO4S5oBYqE3bqkJQDJQ_UZ5qno1ZMvwVtxPz0SyRex3PJoZnE8IqshLAGoB1fheuv4zDghhBZEo=&c=dmzTs9g3LdBODu-lpR8PcaAc8kio3E0zeyd_7Lx-k7j9qvQ7XgK_tQ==&ch=JQTbnXqzfL9KpK5Bhm3u32qd1r-zJaprkXOJogmtYlCeO3OHs3j43Q==
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RCI, Inc., 1500 Sunday Drive, Suite 204, Raleigh, NC 27607


Sent by rci@rci-online.org in collaboration with
This is very stressful work friends, and need all the encouragement I can get.

Many millions of dollars are wastefully spent, and there is absolutely no need for it.  It's just government buying from government, and rewarding friends with guaranteed contracts.

I am thankful for the time you spend with me here.  I know how hard your jobs are, and will do my bloody best to handle these issues, while you are busy trying to feed your families.  

NOTE: Retired 2003, do not solicit nor accept compensation or personal advancement of any kind,

Reject negativity in all forms, and always remember to keep looking "UP".

Respect.

Ron


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