Roadrunner avoids $9.6M in penalties in SEC accounting fraud case

Accounting fraud

An Illinois-based shipping and logistics company accused of engaging in a multiyear accounting fraud scheme avoided further penalties after the Securities and Exchange Commission (SEC) deemed a $20 million class-action settlement agreed to in 2019 returned any ill-gotten gains.

Roadrunner Transportation Systems overstated its income by $66 million from 2011-16 and had to re-evaluate $373.7 million worth of noncash impairment charges as a result of the scheme, the SEC said Tuesday in an administrative proceeding.

Roadrunner did not admit or deny the SEC’s findings but agreed to cease and desist from future violations and pay disgorgement of approximately $7.1 million and prejudgment interest of more than $2.5 million. Those payments were deemed satisfied by a settlement Roadrunner agreed to in U.S. District Court for the Eastern District of Wisconsin in 2019. Approximately $16.4 million of that settlement amount was distributed to shareholders, the SEC’s order said.

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