A former casino company executive was charged with facilitating fraudulent financial statements and disclosures during his time presiding over Hertz Corporation.
The Securities and Exchange Commission accused former Hertz CEO and Chairman Mark Frissora Thursday of pressuring “subordinates to ‘find money’” when the company’s finances fells short of its forecasts in 2013, according to a commission release. The SEC charged him with aiding and abetting Hertz’s financial reporting, books and records violations, as well as failing to repay the company incentive-based compensation he received.
Frissora agreed to a settlement as a result of the charge, requiring him to repay $1,982,654 in bonuses and other incentive-based compensation, pay a $200,000 civil fine and abstain from future financial law violations, the SEC release said.
“Investors are entitled to accurate and reliable disclosures of material information about a company’s financial condition,” said Marc P. Berger, Director of the SEC’s New York Regional Office. The complaint against Frissora was filed in federal court in New Jersey. “We are committed to holding corporate executives accountable when their actions deprive investors of such information.”
Frissora was the CEO at Hertz from 2006 through 2014, prior to his time as the CEO of Caesars Entertainment Corp. from 2015 to 2019. The SEC release makes no mention of the gaming company or his time as its CEO.
During his time as Hertz CEO, the SEC said, Frissora pressured employees to “re-analyzing reserve accounts, causing Hertz’s staff to make accounting changes that rendered the company’s financial reports materially inaccurate.” Additionally, the commission accused him of holding cars for longer periods to lower the company’s depreciation expenses without telling investors and approving Hertz’s earnings guidance in November 2013 despite internal math that projected lower earnings per share.
Furthermore, the SEC release said, “Hertz revised its financial results in 2014 and restated them in July 2015, reducing its previously reported pretax income by $235 million.”
The car rental company agreed to pay a $16 million settlement in December 2018 over fraud and other charges brought by the SEC.