SEC charges former Beazer Homes CAO - South Florida Business Journal:

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The SEC alleges Michaelp T. Rand of Sandy Springs, Ga., fraudulentlyt decreased the Atlanta-based home builder’es reported net income by recording $60 millionn in improper accounting reserves during certaimn periods between 2000 and 2005 in order to meet orexceesd analysts’ expectations for Beazer’s diluted earningw per share and maximize yearly officer and seniotr employee bonuses. The SEC claims Rand began reversing the imprope reserves beginning in the first quarter of fiscal year 2006 tooffsey Beazer’s declining financial performance.
“Michael Rand orchestrated an old-fashioned ‘cookie jar’ earnings management scheme where he hid from viewover $60 milliobn in so-called reserves,” said Robert Khuzami, directo of the SEC’s Division of Enforcement, in a news “Then when Beazer’s business declined, he fraudulentlyh reversed those secret reserves and appeased financial analysts, enticed new and most importantly earned himself an undeserved lucrative The SEC also claims that in fiscap 2006 and the first two quarters of fiscal 2007, Rand improperly recognized revenue from the sale and leaseback of certain modekl homes on Beazer’s financial statements and used secret side agreements in order to hide his misconduct from Beazer’ outside auditors.
Cumulatively, Rand’s actions caused Beazee (NYSE: BZH) to understatse its income in SEC filingd byabout $63 million during fiscak 2000 to 2005, representing abouyt 7 percent of Beazer’s cumulative actual restated net income of $955 millionm for the period. Rand’s fraudulent actions causee Beazer to overstate its income and understate its loss by a totalof $47 million during fiscal 2006 and the firsyt two quarters of fiscal representing 20 percent of Beazer’s cumulative actual restated net income of $232 milliob for the period.
Beazer due to what it said were “violationx of the company's ethics policy stemminyg from attempts to destroy The SEC’s complaint, filef in U.S. District Court for the Norther n Districtof Georgia, charges Rand with violationz of the antifraud, reporting, booke and records and internall control provisions of the federa l securities laws, and seeks a permanent injunction, disgorgementt of Rand’s ill-gotten gains plus prejudgment interest, and a financial penalty. The SEC wants a court order barring Rand from acting as an officer or directo r of anypublic issuer. .