Fluor to Settle SEC Probe Over Improper Accounting

By Mark Maurer

Engineering and construction company Fluor agreed to pay $14.5 million to settle charges over accounting violations on two large-scale projects.

The Securities and Exchange Commission on Wednesday said Fluor bid on the construction projects based on overly rosy estimates around costs and timing. The company experienced cost overruns and failed to adequately maintain internal controls to account for the projects in accordance with U.S. accounting rules, the regulator said.

Fluor failed to include all anticipated costs that were known or should have been known in its forecasts for each project, according to the SEC.

Fluor in 2020 restated its financial statements for fiscal years 2016 to 2018 and several quarters in 2018 and 2019 to correct its overstated earnings. Accounting errors on one of the projects led the company to materially overstate its net earnings by as much as 37% between fiscal 2016 and the first quarter of fiscal 2019, the SEC said.

Five former and current Fluor officers and employees agreed to cease and desist from committing or causing the relevant violations and to pay penalties ranging from $15,000 to $25,000, the SEC said. Neither Fluor nor the officers admitted to, or denied, the SEC's claims.

Fluor didn't immediately respond to a request for comment.

Write to Mark Maurer at mark.maurer@wsj.com

(END) Dow Jones Newswires

September 06, 2023 17:13 ET (21:13 GMT)

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