SEC Charges Former Hertz CEO with Filing of Inaccurate Financial Statements
Mark Frissora allegedly pressured his employees to “find money”
What Happened?
August 18, 2020: The Securities and Exchange Commission of the U.S. charged former Hertz CEO Mark Frissora with aiding and abetting the car rental company in filing inaccurate financial statements. According to the SEC, Frissora pressed employees to make changes to the company’s financial reports in 2013.
Frissora is also accused of failing to disclose to investors that the company was keeping cars for longer periods of time to cut down on depreciation costs.
Who Is Impacted?
Frissora has agreed to pay a $200,000 fine to settle the charges with the SEC, and also to repay his former employer $2 million in incentive-based compensation.
Why This Matters?
For all companies, it is important to understand the importance of accuracy in your statements to investors and the public. This SEC enforcement highlights how the regulator is working to maintain checkpoints of accountability within their capital markets.
What’s Next?
Aside from fines, Frissora will be subject to increased scrutiny during Know-Your-Customer (KYC) reviews, as his name will appear in risk-screening results.
Compliance teams can use recent cases like this to test the effectiveness of their compliance systems. Does this name search produce a result in your U.S. screening procedures? If so, how quickly can your compliance workflows identify and present this new risk to your risk management team?
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Praveen Mandal
A serial entrepreneur, Praveen has been involved with and influential in the founding of five successful startups, most notably serving as CEO of Pipal Systems and president of ChargePoint. He is currently an MIT Connection Science Fellow. Praveen has held senior...
Andrew Csinger, INSEAD
Michael Stephens
Mike Stephens is a leading information technology law partner in the Vancouver office of Fasken (formerly Fasken Martineau LLP). A recognized leader in the British Columbia technology ecosystem, Mike represents companies in all stages of their development, with a...
