Former Delphi CEO, Accountant Owe $333,500 for Records-Keeping Violation
Former Delphi Corp. Chief Executive Officer J. T. Battenberg III must pay a $215,000 for violating U.S. securities laws by misrepresenting a $237 million payment to General Motors Corp., a U.S. judge ruled.
U.S. District Judge Avern Cohn in Detroit today entered that judgment against Battenberg and a $118,500 sanction against former top Delphi accountant Paul Free. A Detroit jury in January found them men misrepresented the GM payment and found Free committed wrong-doing in three other transactions in 2000 and 2001.
The U.S. Securities and Exchange Commission sued the men in 2006. While the jury found the men had represented the GM payment, it cleared the men of claims they committed fraud or helped the Delphi violate securities laws in the transaction.
“The remedies are for the court to decide,” Cohn said in separate memoranda explaining his rationale for each assessment.
Once the biggest U.S. auto-parts supplier, Troy, Michigan- based Delphi filed for bankruptcy protection after failing to win wage cuts and financial assistance from its former corporate parent, GM.
Delphi emerged from bankruptcy court protection in 2009.
Attorneys for the Battenberg and Free said during trial there was no attempt to mislead investors and their clients didn’t commit fraud. The jury agreed there had been no fraud.
Battenberg’s lawyer, William Jeffress, didn’t immediately reply to a request for comment e-mailed after hours. Free’s lawyer, Matthew Lund, didn’t immediately reply to an after-hours e-mailed request for comment.
The case is SEC v. Battenberg, 06cv14891, U.S. District Court, Eastern District of Michigan (Detroit).
To contact the editor responsible for this story: Michael Hytha at email@example.com.