SEC charges Delphi, 7 former executives
Delphi's former chief financial officer paid a 687,000 fine.
WASHINGTON (AP) -- The Securities and Exchange Commission filed charges Monday against Delphi Corp. and several of its former top executives, accusing the auto parts supplier of committing accounting fraud to hide the poor conditions of its finances.
The SEC, in a filing in federal court in Detroit, charged seven former Delphi executives, including former CEO J.T. Battenberg, and two outsiders with participating in or aiding and abetting the company's fraud.
The government said in a statement that the Troy, Mich.-based company had settled its charges and will not face penalties because of its cooperation with investigators.
The agency also said it had settled charges with six of the people named in the complaint, including former Chief Financial Officer Alan Dawes, who agreed to pay 687,000 in fines and restitution.
Battenberg was not among those who settled, according to the SEC.
The SEC investigation found that Delphi had manipulated its earnings from 2000 to 2004, using several illegal schemes to boost its earnings, including the concealment of a 237 million transaction in 2000 with its former parent company, General Motors Corp., involving warranty costs.
Linda Chatman Thomsen, director of the SEC's division of enforcement, said the facts were "particularly troubling because of the number of fraudulent schemes engaged in by Delphi, the length of time over which they occurred, and the number of Delphi employees, including senior officers, who carried out the schemes."
The SEC said its investigation was continuing.
In addition to Battenberg and Dawes, the SEC complaint also named Paul Free, Delphi's former controller and chief accounting officer; John Blahnik, Delphi's former treasurer and senior vice president; Milan Belans, Delphi's former director of capital planning and pension analysis; Catherine Rozanski, Delphi's former director of financial accounting and reporting; and Judith Kudla, former director of finance in Delphi's information technology department.
Others charged include: Scot McDonald, who works for a Texas-based information technology company and formerly served as manager of U.S. GAAP Consulting and Reporting; B.N. Bahadur, who led a Michigan-based private management consulting company.
In addition, the complaint charged four other people with aiding and abetting Delphi's reporting and books-and-records violations: Atul Pasricha, Delphi's former assistant treasurer; Laura Marion, Delphi's former director of financial accounting and reporting; Stuart Doyle, a former client executive supporting the Texas IT company's relationship with Delphi; and Kevin Curry, a former client executive supporting the Texas IT company's relationship with Delphi.