In what is believed to be the first case of its kind, an Indiana manufacturer settled charges with the Securities and Exchange Commission earlier this month that poor internal controls led to five years of sloppy accounting and a restatement that nicked company financial reports by $16 million.
The Feb. 9 settlement with Cummins Inc., a $4.6 billion maker of power equipment, appears to be the first time the SEC has specifically targeted lax internal controls as the subject of an enforcement action, says Blase Dillingham, a partner with the Los Angeles office of the law firm Manatt, Phelps & Phillips.
