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SEC settles with 4 companies over prolonged control lapses

Tammy Whitehouse | January 30, 2019

Back on the beat after a reprieve from government shutdown furlough, the Securities and Exchange Commission settled charges with four public companies over prolonged failures to maintain internal control over financial reporting.

The SEC says the four companies failed to maintain internal control for seven to 10 consecutive annual reporting periods, and two of the companies failed to even complete the required evaluation of controls for two consecutive years. The SEC says the four companies repeatedly disclosed material weaknesses in controls involving high-risk areas of financial statement presentation, yet took months or years to remediate problems after SEC staff spoke up. One of the four companies is still working to correct control issues, the SEC said.

“Companies cannot hide behind disclosures as a way to meet their ICFR obligations,” said Melissa Hodgman, an associate director in the SEC’s Enforcement Division, in a statement. “Disclosure of material weaknesses...

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