2023-03-31 sec-litreleases litigation_release 66 KB 2,339 chars

SEC v. Craig D. Perciavalle; Joseph A. Runkel; and William O. Adams, No. LR-25684, Southern District of Alabama (Mar. 31, 2023) — Press Release

raw: Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams

Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams, No. 1:23-cv-00109 (Mar. 31, 2023)

Caption
Cummings v. Koninklijke Philips N.V.
Source PDF JSON
summary

The SEC charged three Austal USA executives with orchestrating a fraudulent revenue recognition scheme to meet analyst expectations, seeking disgorgement and officer bars.

paragraph

The SEC charged Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams for artificially reducing shipbuilding cost estimates by tens of millions of dollars. Between 2013 and 2016, the executives allegedly manipulated costs to ensure parent company Austal Limited met or exceeded earnings expectations. The complaint alleges violations of Section 10(b) of the Exchange Act and seeks disgorgement, civil penalties, and officer and director bars.

narrative

The SEC has charged three executives of the Alabama-based shipbuilder Austal USA—Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams—with orchestrating a fraudulent revenue recognition scheme. From January 2013 through July 2016, the defendants allegedly reduced cost estimates for U.S. Navy shipbuilding projects by tens of millions of dollars. This manipulation was intended to meet revenue budgets and allow parent company Austal Limited to prematurely recognize revenue to meet or exceed analyst earnings expectations. The SEC's complaint, filed in the U.S. District Court for the Southern District of Alabama, alleges violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5. The regulatory body is seeking disgorgement, prejudgment interest, civil money penalties, and officer and director bars against the defendants.

Enriched metadata

Scheme
accounting-fraud (99%)
Court
Southern District of Alabama
Case No.
1:23-cv-00109
Entity
Austal Limited
Ticker
ASL
Classified accounting-fraud(confidence 99%). EDGAR detection: forms 10-K/10-Q/8-K/NT 10-K· recall 80% / precision 48%. detection rule →
Statutes
Section 10(b) of the Securities Exchange ActRule 10b-5
Parties
CummingsKoninklijke Philips N.V.
Keywords
austal usa'saustalexchangecraig perciavallejoseph runkelwilliam adamssecurities exchangeperciavallerunkeladamsperciavalle josephrunkel williamexchange commissionusa'scraig

Exhibits & Attached Documents (2)

Extracted insights

Entities 8
  • company austal limited
  • organization Austal Limited
  • company Austal USA
  • person disgorgement plus prejudgment interest
  • person fraudulent revenue recognition scheme
  • agency sec investigation
  • agency Securities and Exchange Commission
  • organization Securities and Exchange Commission
Triples 10
  • Securities And Exchange Commission Charged Craig D. Perciavalle, Joseph a. Runkel, And William O. Adams
  • Craig D. Perciavalle, Joseph a. Runkel, And William O. Adams Orchestrated Fraudulent Revenue Recognition Scheme
  • Austal USA Recognized Revenue Prematurely
  • Austal Limited Recognized Revenue Prematurely
  • SEC Seeks Disgorgement Plus Prejudgment Interest
  • SEC Alleges Violations Of Section 10(b) Of The Securities Exchange Act
  • Craig D. Perciavalle, Joseph a. Runkel, And William O. Adams Violated Section 10(b) Of The Securities Exchange Act
  • Austal USA Lowered Cost Estimates By Tens Of Millions Of Dollars
  • Kimberly Steckling, Kenneth Stalzer, And Donna Walker Conducted SEC Investigation
  • Sharan Lieberman And Christopher Martin Lead Litigation
PDF (from attached: complaint)
SEC v. CRAIG D. PERCIAVALLE · Source
Text layers
Extracted body text (2,339c) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25684 / March 31, 2023 Securities and Exchange Commission v. Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams, No. 1:23-cv-00109 (S.D. Ala. filed March 31, 2023) SEC Charges Three Executives At U.S. Navy Shipbuilder Austal USA with Accounting Fraud Washington D.C., March 31, 2023 - The Securities and Exchange Commission today charged three executives of Mobile, Alabama-based shipbuilder, Austal USA, LLC, for orchestrating a fraudulent revenue recognition scheme that allowed its parent company to meet or exceed analyst expectations. The SEC alleges that, from at least January 2013 through July 2016, Austal USA's former president, Craig D. Perciavalle, its current director of financial analysis, Joseph A. Runkel, and former director of the Littoral Combat Ships program, William O. Adams, engaged in a scheme to artificially reduce the cost estimates to complete certain shipbuilding projects for the U.S. Navy by tens of millions of dollars. The complaint alleges that Perciavalle, Runkel, and Adams knew that Austal USA's shipbuilding costs were rising and higher than planned, but they directed others to arbitrarily lower the cost estimates to meet Austal USA's revenue budget and revenue projections. The complaint further alleges that Austal USA's parent company, Australia-based Austal Limited, prematurely recognized revenue and, as a result, met or exceeded analyst consensus estimates for earnings before interest and tax ("EBIT"), a key financial metric for the company. The SEC's complaint, filed in the U.S. District Court for the Southern District of Alabama, alleges that Perciavalle, Runkel, and Adams violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rules 10b-5(a) and (c) thereunder, aided and abetted Austal USA's and Austal Limited's violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and seeks disgorgement plus prejudgment interest, civil money penalties, and officer and director bars. The SEC's investigation was conducted by Kimberly Steckling, Kenneth Stalzer, and Donna Walker and supervised by Ian Karpel, Nicholas Heinke, and Jason Burt. The litigation is being led by Sharan Lieberman and Christopher Martin and supervised by Gregory Kasper. SEC Complaint
OCR text (2,339c · html-text · 99% conf) 
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 25684 / March 31, 2023 Securities and Exchange Commission v. Craig D. Perciavalle, Joseph A. Runkel, and William O. Adams, No. 1:23-cv-00109 (S.D. Ala. filed March 31, 2023) SEC Charges Three Executives At U.S. Navy Shipbuilder Austal USA with Accounting Fraud Washington D.C., March 31, 2023 - The Securities and Exchange Commission today charged three executives of Mobile, Alabama-based shipbuilder, Austal USA, LLC, for orchestrating a fraudulent revenue recognition scheme that allowed its parent company to meet or exceed analyst expectations. The SEC alleges that, from at least January 2013 through July 2016, Austal USA's former president, Craig D. Perciavalle, its current director of financial analysis, Joseph A. Runkel, and former director of the Littoral Combat Ships program, William O. Adams, engaged in a scheme to artificially reduce the cost estimates to complete certain shipbuilding projects for the U.S. Navy by tens of millions of dollars. The complaint alleges that Perciavalle, Runkel, and Adams knew that Austal USA's shipbuilding costs were rising and higher than planned, but they directed others to arbitrarily lower the cost estimates to meet Austal USA's revenue budget and revenue projections. The complaint further alleges that Austal USA's parent company, Australia-based Austal Limited, prematurely recognized revenue and, as a result, met or exceeded analyst consensus estimates for earnings before interest and tax ("EBIT"), a key financial metric for the company. The SEC's complaint, filed in the U.S. District Court for the Southern District of Alabama, alleges that Perciavalle, Runkel, and Adams violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rules 10b-5(a) and (c) thereunder, aided and abetted Austal USA's and Austal Limited's violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and seeks disgorgement plus prejudgment interest, civil money penalties, and officer and director bars. The SEC's investigation was conducted by Kimberly Steckling, Kenneth Stalzer, and Donna Walker and supervised by Ian Karpel, Nicholas Heinke, and Jason Burt. The litigation is being led by Sharan Lieberman and Christopher Martin and supervised by Gregory Kasper. SEC Complaint

Related documents (2)