Two former executives of trucking company Celadon Group each agreed to pay $50,000 to settle charges levied by the Securities and Exchange Commission (SEC) they engaged in accounting fraud to inflate the company’s earnings.
William Eric Meek, the former president and chief operating officer of Celadon, and Bobby Peavler, the former chief financial officer, ran a scheme involving buying trucks and then selling them at two to three times their fair market value, the SEC alleged in its December 2019 complaint. The agency announced the settled charges in a litigation release Monday.
The agreements with the executives follow a $42.2 million settlement between Celadon and the SEC in April 2019. The agency alleged the company filed materially false and misleading statements to investors and falsified books, records, and accounts.
Celadon filed for bankruptcy in December 2019 and shutdown.
The aim of the alleged scheme by Meek and Peavler was to hide Celadon’s failure to write down the trucks’ net book values and take impairment charges. This allowed Celadon to overstate its pre-tax income, net income, and earnings per share in its reports between mid-2016 and April 2017, the SEC alleged.
The SEC charged Meek and Peavler with violating anti-fraud provisions of federal securities laws, lying to auditors, and aiding and abetting Celadon’s books and records and reporting violations. They both agreed to be barred from acting as an officer or director of a public company or practicing as accountants for three years.