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Georgia carpet giant and former executives fined by federal regulators
By Matt Kempner, The Atlanta Journal-Constitution #atlanta-ga
Federal regulators slapped the Atlanta-based carpet giant Interface with a $5 million civil penalty, saying the company reported inflated financial results that misled shareholders. Two former senior executives also were hit with penalties, the U.S. Securities and Exchange Commission announced Monday.
During 2015 and 2016, the company reported inflated income and earnings per share results, the SEC said. At times, the changes made it appear that Interface had met or exceeded analysts’ consensus estimates for company results, an important achievement for some investors. The adjustments did not comply with generally accepted accounting principles, according to the SEC.
Interface, which makes carpet tiles, said that, while it consented to the SEC order that states the company was negligent, it neither admits nor denies any wrongdoing. In a corporate filing, it said it has improved “internal controls and its accounting and finance functions to prevent these types of issues from occurring again.”
The SEC fined Interface’s former Controller and Chief Accounting Officer Gregory Bauer and former Chief Financial Officer Patrick Lynch for the financial reporting it questioned.
Lynch will pay $70,000 in civil penalties, and Bauer will pay $45,000, the SEC said.
Interface has faced other challenges in recent months. In January, the company’s board ousted then Chief Executive Officer Jay Gould, alleging “personal behavior that violated Company policy and core values.” Gould then sued, claiming Interface defamed him and retaliated against him “for his opposition to discriminatory hiring practices.”