Austal USA Settles SEC Charges of Accounting Fraud, Pleads Guilty in Parallel Criminal Case

SEC Charges U.S. Navy Shipbuilder Austal USA with Accounting Fraud

The Securities and Exchange Commission today announced that Austal USA, LLC, a Mobile, Alabama-based shipbuilder, and its Australia-based parent company, Austal Limited, have agreed to settle the SEC’s charges that the companies conducted a fraudulent revenue recognition scheme. As part of the settlement with the SEC, Austal USA will pay a $24 million civil penalty.

According to the SEC’s complaint, from at least January 2013 through July 2016, the Austal companies engaged in a scheme to artificially reduce by tens of millions of dollars the estimated cost to complete certain shipbuilding projects for the U.S. Navy. The complaint alleges that Austal USA knew that its shipbuilding costs were rising and higher than planned, but arbitrarily lowered the cost estimates to meet Austal USA’s revenue budget and projections. The complaint further alleges that based on this fraudulent manipulation of the cost estimates, Austal Limited prematurely recognized revenue and, as a result, met or exceeded analyst consensus estimates for earnings before interest and tax, known as EBIT, a key financial metric for the company.

Accountants Are in Short Supply. Can They Get Sexier, Fast?

Accountants have become an endangered species, and that’s endangering the financial ecosystem. But bolstering their ranks is no easy feat.

“The pay is crappy, the hours are long, and the work is drudgery,” said Richard Rampell, a retired accountant in South Florida. “And the drudgery is especially so in their early years.” …

Gen Z is also, notably, the first generation to have truly grown up with social media. They spent their childhoods watching a stream of what everyone else does with their lives, and many have become convinced that that’s much better than whatever they’re doing with their own. In this way, social media has incentivized them to focus on doing things their peers deem interesting or exciting. And, well, accounting isn’t readily Instagrammable.

Then there’s the double-whammy problem of becoming an accountant, which is both harder to achieve and pays less than other finance jobs….

SEC Charges China-based QZ Asset Management Ltd. and its CEO in Pre-IPO Fraud Scheme

The Securities and Exchange Commission today announced charges against China-based investment adviser QZ Asset Management Limited a/k/a Qianze Asset Management Limited (QZ Asset), its South Dakota-based holding company QZ Global Limited, and the CEO of both entities, Blake Yeung Pu Lei a/k/a Yang Pulei (Yeung), with fraud for lying to clients and prospective clients regarding the safety of their investments, the investment adviser’s relationships with certain well-known banks and law firms, and the holding company’s initial public stock offering.

The SEC complaint alleges that QZ Asset, QZ Global, and Yeung defrauded hundreds of individuals out of at least $6 million. According to the complaint, QZ Asset and Yeung falsely claimed that QZ Asset would use its proprietary AI-based technology to help generate extraordinary weekly returns while promising “100%” protection for client funds and that well-known and reputable financial and legal firms were providing services to the company. The complaint also alleges that the defendants falsely claimed that QZ Global had applied to have its common stock listed on the Nasdaq Global Select Market and that they had positive communications with SEC staff regarding this effort. In addition, QZ Global allegedly touted its SEC filings, which were materially deficient, to lure clients and prospective clients into handing over their funds to QZ Asset. According to the complaint, after engaging in this global, multi-million-dollar fraud, the defendants allegedly stopped communicating with clients and QZ Asset’s website, which clients used to access their funds, was taken down.

Conservative law’s new superstar has a familiar name: Scalia

Few people have done more to stymie US President Joe Biden’s bold attempts to rein in big business than Eugene Scalia.

In recent months, his legal arguments have thrown roadblocks in front of climate disclosure rules, regulations for private funds and the Federal Trade Commission’s ban on non-compete agreements that make it hard for workers to change jobs.

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Scalia has clashed particularly frequently with the SEC, where chair Gary Gensler has promulgated 41 new rules aimed at increasing transparency and protecting investors. Scalia and his clients contend the agency has repeatedly overstepped its legal authority on issues ranging from private fund disclosure to the rules for hedge funds and traders operating in the US Treasury market.

COVID-Related Securities Suit Filed Against Electronic Components Company

Here we are, well into the fifth year since the initial outbreak of COVID-19 in the U.S., and yet coronavirus-related securities lawsuits are still being filed. In the latest example, earlier this week plaintiffs’ lawyers filed a securities class action lawsuit against the electronics manufacturing firm Methode Electronics based in part on allegations concerning problems allegedly caused by the company’s loss of key personnel during the pandemic. A copy of the August 26, 2024, complaint can be found here.

Musk’s Legal Fights Boost Longshot Texas Bid to Become Court Hub

A low-slung brick building across the street from a dingy parking garage in Wilmington, Delaware, is a legal address for nearly 300,000 businesses, including Walmart Inc., General Motors Co. and Goldman Sachs Group Inc.

The major draw for those companies — and hundreds of thousands of other corporations, LLCs and LPs incorporated in the tiny state — is a 15-minute walk away: the Delaware Court of Chancery.

It’s the world’s preeminent business court, but it’s now facing an unlikely challenge from Texas where officials are planning to launch their own version next week. Unlike Delaware’s venerable two-century-old commercial court, the Lone Star State’s version resembles a startup. There are no designated courtrooms and some staff still haven’t been hired.