Thor Industries Inc. (THO), the biggest U.S. maker of recreational vehicles, agreed to pay $1 million to settle a U.S. Securities and Exchange Commission lawsuit claiming one of its executives underreported company costs.
The proposed settlement was filed in federal court in Washington yesterday along with a complaint that alleges Mark Schwartzhoff, the former vice president of finance at Thor’s Dutchmen Manufacturing Inc., “engaged in a fraudulent accounting scheme to understate Dutchmen’s cost of goods sold.”
Schwartzhoff overstated Dutchmen’s pretax income by almost $27 million from fiscal year 2003 to the second quarter of fiscal 2007, according to the SEC. The executive, who was fired in 2007, agreed to pay almost $400,000 in penalties, according to court filings.
“Thor’s failure to maintain accurate books and records and adequate internal accounting controls violated a 1999 commission cease-and-desist-order,” the SEC in said court papers, referring to similar misconduct at a different Thor unit.
Without admitting or denying the allegations, Thor Industries agreed to hire an SEC-approved independent consultant to evaluate its internal accounting controls at its headquarters in Jackson Center, Ohio, and at its other units. The agreement requires court approval.
Richard Riegel, Thor’s senior group president, said the company looks forward to working with the independent consultant.
“We’re just pleased the issue has come to a resolution because we’ve become a much, much, much better company,” he said.
The case is SEC v. Thor Industries, 11-cv-00889, U.S. District Court, District of Columbia (Washington).
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