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Hertz to pay $16M civil penalty for accounting violations

Jaclyn Jaeger | January 2, 2019

Car rental company Hertz Global Holdings will pay a $16 million civil penalty to settle a case concerning inaccurate financial reporting, the Securities and Exchange Commission announced in an order filed Dec. 31.

According to the SEC cease-and-desist order, from at least February 2012 through March 2014, Hertz’s public filings materially misstated pretax income due to accounting errors made in several business units and over multiple reporting periods, as reflected in the restatement Hertz filed in July 2015.

“Part of the misstated income resulted from errors made in various accounts that are subject to management estimate,” the SEC order stated. “For example, Hertz’s car rental business routinely recovers sums of money from third parties for damages that occur during rental. Hertz estimated an allowance for uncollectible amounts as an offset to what it recorded as potential recoveries.”

“For...

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