Showing posts with label Tremco overbilling. Show all posts
Showing posts with label Tremco overbilling. Show all posts

Thursday, March 30, 2017

Tremco, the "Darlings" of Purchasing Cooperatives. .

Any school administrator should know this before it's too late. The schools, and other public works that Tremco defrauded got NOTHING!

https://www.sec.gov/litigation/litreleases/2016/lr23639.htm  


U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23639 / September 9, 2016

Securities and Exchange Commission v. RPM International Inc., et al., Case No. 16-cv-01803 (D.D.C. filed Sept. 9, 2016)

SEC Charges RPM International Inc. and its General Counsel for Disclosure and Accounting Failures

The Securities and Exchange Commission today charged Ohio-based chemical company RPM International Inc. and its General Counsel, Edward W. Moore, with failing 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.

The SEC alleges that, from 2011 through 2013, RPM and one of its subsidiaries were under investigation by the U.S. Department of Justice (DOJ) for overcharging the government on certain contracts. 

Moore, RPM's General Counsel and Chief Compliance Officer, oversaw RPM's response to the DOJ investigation. According to the SEC's complaint, however, Moore did not inform RPM's CEO, CFO, Audit Committee, and independent auditors, of material facts about the investigation. 

For example, Moore knew but failed to inform them 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.

NOTE:  The DOJ already fined Tremco $61,000,000.00 for overbilling.  Again, the ones who were defrauded (primarily schools) got NOTHING.  

As a result of Moore's conduct, the SEC alleges that RPM filed multiple false and misleading documents with the SEC. For example, among other things, RPM failed to disclose in its filings with the SEC 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. RPM also failed to disclose in its SEC filings a material weakness in its internal control over financial reporting and its disclosure controls when in fact such weakness existed. 

Consequently, RPM did not provide investors with accurate information about RPM's financial condition. In August 2014, RPM restated 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. 

In the restated filings, RPM also disclosed errors relating to the timing of its disclosure and accrual for the DOJ investigation.

The SEC's complaint charges RPM with violating antifraud provisions of the federal securities laws, Sections 17(a)(2) and (a)(3) of the Securities Act of 1933; the reporting provisions of the federal securities laws, Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder; and the books and records and internal controls provisions of the federal securities laws, Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. The complaint also charges Moore with violating Sections 17(a)(2) and (a)(3) of the Securities Act and Rules 13b2-1 and 13b2-2 under the Exchange Act. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains plus interest, and penalties.
The SEC's investigation was conducted by Timothy K. Halloran and Michael J. Hoess. The SEC's litigation will be conducted by H. Michael Semler, Gregory R. Bockin, Mr. Halloran, and Mr. Hoess.
 SEC Complaint

http://www.sec.gov/litigation/litreleases/2016/lr23639.htm