In re FLUOR CORPORATION

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 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98292 / September 6, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21610 
 
In the Matter of 
 
FLUOR CORPORATION,  
 
Respondent. 
 
ORDER INSTITUTING CEASE-AND-
DESIST PROCEEDINGS, PURSUANT TO 
SECTION 21C OF THE SECURITIES 
EXCHANGE ACT OF 1934, MAKING 
FINDINGS, AND IMPOSING A CEASE-
AND-DESIST ORDER  
   
I. 
 
 The Securities and Exchange Commission (“Commission” or “SEC”) deems it appropriate 
that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 
Securities Exchange Act of 1934 (“Exchange Act”) against Fluor Corporation (“Fluor” or 
“Respondent”).   
 
II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 
purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 
herein, except as to the Commission’s jurisdiction over the Respondent and the subject matter of 
these proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 
Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds
1
 that  
 
 
1
 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 
on any other person or entity in this or any other proceeding.  

 2 
Summary 
 
1. This matter involves deficiencies in Fluor’s accounting over a period of years for 
two fixed-price construction projects on which Fluor carried a risk of cost overruns with respect to 
work within the contract’s scope.  Fluor bid on these projects, relying on overly optimistic cost and 
timing estimates.  Following each project’s contract award, Fluor experienced cost overruns that 
worsened over time.  Yet, Fluor failed to maintain a system of internal accounting controls 
sufficient to account for these contracts in accordance with U.S. Generally Accepted Accounting 
Principles (“GAAP”).  These failings resulted in inaccurate books and records and ultimately in 
materially misstated financial statements included in periodic reports filed with the SEC. 
 
2. In August 2019, Fluor announced $714 million in pre-tax charges stemming from an 
“operational and strategic review” of sixteen projects.  These included a project requiring Fluor to 
validate and complete the design and to build a one-of-a-kind U.S. Army facility for manufacturing 
nitrocellulose, an ammunition propellant, (“Radford” or the “Radford Project”), and a project 
requiring Fluor to design and build a Floating Production Storage and Offloading (“FPSO”) facility 
for delivery to the Penguins oil and gas field located in the North Sea (“Penguins” or the “Penguins 
Project”).   
   
3. Prompted by the SEC staff’s investigation, Fluor undertook an internal investigation 
in 2020 that identified material weaknesses in its internal control over financial reporting and 
material errors in its financial statements, and resulted in Fluor restating its annual and quarterly 
financial statements for its fiscal year 2016 through the third quarter of 2019, as disclosed in its 
2019 Form 10-K filed with the SEC on September 25, 2020 (the “Restatement”).  The material 
weaknesses identified in the Restatement were attributable to control failures associated with the 
Radford and Penguins projects, which resulted in material errors.  Throughout the fiscal year ended 
December 31, 2016 through the first quarter ended March 31, 2019 (“Relevant Period”), Fluor’s 
accounting issues on Radford resulted in materially overstated net earnings in Fluor’s reported 
financial statements.  Fluor overstated its annual net earnings by $51 million (22%) in 2016, by $38 
million (25%) in 2017, and $43 million (25%) in 2018, and understated its net loss by $3 million 
(5%) in the first quarter of 2019.  On the Penguins Project, Fluor’s delayed recognition of its loss for 
two quarters resulted in Fluor overstating its net earnings by $17 million (22%) in the second 
quarter of 2018.  
 
4. As a result of conduct detailed herein, Fluor violated Sections 13(a), 13(b)(2)(A), 
and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a), and 12b-20 thereunder. 
 
Respondent 
 
5. Fluor Corporation is a Delaware corporation with its principal place of business in 
Irving, Texas.  Since registering its common stock with the SEC under Section 12(b) of the 
Exchange Act in 2000, Fluor has been required to file periodic reports on Forms 10-K and 10-Q 
with the SEC pursuant to Section 13(a) of the Exchange Act and related rules thereunder.  During 
the Relevant Period, the stock traded on the New York Stock Exchange under the ticker symbol 
“FLR.”  Fluor performs engineering, procurement, and construction services worldwide and 

 3 
operates through business segments, which, during the Relevant Period, included the two segments 
responsible for Radford and Penguins, respectively known as the Fluor Government Group 
(“FGG”) and Energy & Chemicals (“E&C”).   
 
Background 
 
6. Under GAAP, Fluor accounted for its fixed-price projects Radford and Penguins 
using the percentage of completion (“POC”) method, whereby it was required to periodically 
recognize a project’s costs as incurred and the revenue as a percentage of the work completed to 
date.  Under this method, for each reporting period, a project team develops dependable estimates 
of expected total revenues, total costs, and total project gross margin (“PGM”) to arrive at a 
project’s financial forecast (known as the Estimate at Completion or “EAC”).  A project must 
recognize the entire amount of an anticipated loss as soon as the loss becomes evident. 
 
7. To periodically record a project’s EAC, Fluor required use of the Project Margin 
Analysis Report (“PMAR”), which should document project management’s most likely current 
estimate of the project’s revenue, cost, and PGM forecast.  Fluor required key personnel to certify 
PMAR accuracy quarterly.  On the Radford Project, Fluor failed to maintain adequate internal 
controls over the PMAR process.  Although Fluor’s accounting policy required the project team to 
determine the most likely EAC, it failed to maintain this control during the Relevant Period, as 
personnel failed to include all costs that were known or should have been known and, from the 
period ending December 31, 2017 through March 31, 2019, improperly included revenue from 
unapproved change orders in the accounting for Radford’s EAC.   
 
8. Similarly, Fluor failed to maintain sufficient internal accounting controls over the 
PMAR process on the Penguins Project.  Moreover, costs that were known or should have been 
known were excluded from the EAC in the second and third quarters of 2018.      
 
Radford Project 
 
9. In December 2015, Fluor finalized a $245 million fixed price subcontract with its 
customer (“Customer A”) for the Radford Project to validate and complete the design and to build 
the Radford Project.  As part of the scope of work, Fluor was provided an incomplete design from 
the prior, terminated subcontractor (“Prior Design”) that it was required to validate and complete 
when performing the subcontract.  Fluor was told during the bidding process that agreeing to 
validate and complete the facility’s design was risky because FGG personnel did not know the 
Prior Design’s quality or completeness.  By early 2016, certain Fluor personnel realized that the 
incomplete and flawed Prior Design was causing significant additional cost and delay on the 
Radford Project.   
 
 Costs that Were Known or Should Have Been Known Were  
Improperly Excluded from the EAC 
 
10. During the Relevant Period, the difference between the subcontract price and the 
anticipated total cost of the Radford Project grew significantly as delays and cost overruns 

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worsened.  The growing anticipated total costs over the subcontract price should have prompted 
Fluor to revise the EAC to reflect all the additional anticipated costs.  Instead, Fluor improperly 
excluded certain such costs from the total cost estimate in the EAC.  Generally, Fluor personnel 
added costs to the EAC only to the extent that the costs could be offset by corresponding added 
forecasted revenues, which were determined using overly high assumed rates of recovery, as 
described below. 
 
11. As a result, Fluor’s forecasted cost in the EAC remained artificially low and 
delayed loss recognition.  Fluor’s failure to maintain sufficient internal accounting controls 
governing the PMAR process contributed to this result.   
 
Revenues from Change Orders Were Improperly Included in the Forecast 
 
12. From year-end 2017 through the first quarter of 2019, to address the growing 
anticipated total cost over the original subcontract price, Fluor personnel determined to develop 
and submit change orders, also known as Project Change Notices (“PCNs”).  PCNs are proposed 
modifications of a contract that change the price or scope of work of the contract, or both.  Fluor 
personnel developed PCNs for submission to Customer A for approval.  Fluor then forecasted 
additional revenue from the PCNs using overly high rates of assumed cost recovery on the PCNs, 
including for unapproved PCNs.  As a result, this revenue offset additional forecasted costs and 
minimized the adverse impact on the PGM.  The amount of unapproved PCNs, including rejected 
and not yet submitted PCNs, in the forecast increased during the Relevant Period, but Fluor’s 
actual rates of recovery from approved PCNs remained low, as reflected below: 
 
Radford Project 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 
Unapproved PCNs in revenue 
forecast, net of profit fee  
$47M  $68M  $69M  $68M  $118M $132M  
Assumed recovery rate of net PCN 
revenue in revenue forecast  
100% 100% 90% 80% 80% 78% 
Percent of total PCN revenue 
actually approved by Customer A 
4.5% 3.9% 3.4% 2.4% 3.9% 6.1% 
 
13. Through fiscal year-end 2017, Fluor was required to record revenue for unapproved 
PCNs under POC accounting in compliance with ASC Subtopic 605-35, Construction-Type and 
Production-Type Contracts (“ASC 605-35”), and could only record it if recovery of the additional 
revenue was deemed probable.  Under ASC 605-35, a PCN should be evaluated as a “claim” if it 
was a change order in dispute or unapproved as to both scope and price.  Revenue recognition for a 
claim under ASC 605-35 required a heightened level of evidence to demonstrate probable 
recovery.  For the fiscal year ended December 31, 2017, even though the relevant PCNs were 
either in dispute or were unapproved as to price and scope, Fluor wrongly categorized them as 
unpriced change orders, instead of claims.  As a result, Fluor did not obtain sufficient evidence to 
demonstrate probable recovery of the PCNs under ASC 605. 
 
14. In the first quarter of 2018, Fluor adopted ASC 606, Revenue from Contracts with 
Customers (“ASC 606”), which superseded the revenue recognition requirements in ASC 605.  

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Under ASC 606, Fluor could only include the unapproved PCNs in the revenue forecast if Fluor 
had an enforceable contractual right to additional revenue beyond the fixed contractual price, 
considering all relevant facts and circumstances, including the terms of the contract.  From the first 
quarter of 2018 through the end of the Relevant Period, Fluor did not sufficiently evaluate under 
ASC 606 if it had an enforceable contractual right to the unapproved PCNs.  Without such an 
evaluation, it was improper to include revenue from the unapproved PCNs in its forecast.  Even if 
Fluor had sufficiently evaluated under ASC 606 whether it had an enforceable contractual right to 
the unapproved PCNs, it was only permitted to increase forecast revenue to the extent it was 
probable that a significant reversal in the amount of cumulative revenue recognized would not 
occur, weighing factors such as the limited predictive value from Fluor’s prior experience given 
the low recovery rates, the length of time it would take to resolve and susceptibility to the 
judgment of third-parties.  But Fluor lacked sufficient evidence of it being probable under ASC 
606 that a significant reversal of revenue would not occur for unapproved PCNs.  
   
15. Fluor personnel prepared documentation to support the Radford accounting for 
year-end 2017, year-end 2018, and the first quarter of 2019.  This control activity’s objective was 
to document the facts and analysis supporting revenue estimates on projects with significant risks 
and judgments, in accordance with GAAP.  This documentation did not adequately support Fluor’s 
enforceable right to the revenue and failed to support that recovery from Customer A was 
probable.  Fluor stated that it was entitled to payment because Customer A misrepresented the 
status of the Prior Design.  But, it was not probable under GAAP that Fluor would recover 
money from Customer A to pay for the delays and design issues underlying the majority of 
PCNs.  Rather, throughout the Relevant Period, Customer A rejected most PCNs, blamed Fluor 
for the design problems, and maintained that Fluor was responsible for the additional costs under 
the terms of the existing fixed-price contract.  Fluor did not obtain objective evidence to support 
recording the revenue during the Relevant Period. 
 
16. For example, for year-end 2017, in support of its assumed 100% recovery, Fluor 
largely relied on the assertion that a Customer A employee allegedly “verbally acknowledged 
[Customer A’s] responsibility for” the PCNs.  In fact, the Customer A employee said that 
Customer A would undertake a revamped process to assess PCNs, not that it would approve or 
pay for any individual PCN.  
 
Impact on Fluor’s Financial Statements 
 
17. As of year-end 2016, the Radford Project was, in reality, operating at a loss.  
Fluor’s improper exclusion of costs that were known or should have been known led to inaccurate 
books and records during the reporting period ended December 31, 2016.  Fluor’s improper 
inclusion of the unapproved PCN revenue and the continuing improper exclusion of anticipated 
costs that were known or should have been known resulted in inaccurate books and records in 
reporting periods from year-end 2017 through the first quarter of 2019.  As a result of the errors 
described above, Fluor materially misstated its net earnings in periodic reports filed with the SEC 
as follows:  
 

 6 
Reporting Period Overstated Net Earnings 
 
As % of Reported Net 
Earnings (Loss) 
2016 (annual) $50.9 million 22% 
2017 (annual) $38.4 million 25% 
Q1 2018 $8.7 million (33%) 
Q2 2018 $7.5 million 10% 
Q3 2018 $8.8 million 12% 
Q4 2018 $17.8 million 37% 
2018 (annual) $42.8 million 25% 
Q1 2019 $3.3 million (5%) 
 
Fluor corrected the foregoing errors in the amended financial statements included in the 
Restatement. 
 
18. Additionally, Fluor’s 2018 Form 10-K and the Form 10-Q for the first quarter of 
2019 included a materially misstated disclosure regarding Radford PCNs: “The company’s 
[Radford] forecast is based on its assessment of the probable resolution of certain change orders 
submitted to the client which are currently under discussion, and if not achieved, could adversely 
affect revenue and segment profit.”  This was a misstatement because many PCNs were not “under 
discussion,” but either formally rejected or not yet submitted, and it failed to note that lack of 
favorable resolution on the PCNs could have a material adverse effect on revenue and 
consolidated profit due to the large value of those PCNs.  Finally, the disclosure omitted the 
amount of the unapproved PCNs, which was required under GAAP, specifically ASC 910-20-50-1, 
and SEC Regulation S-X Rule 5-02.3(c)(3).  
 
Penguins Project 
 
19.   In December 2017, the E&C segment of Fluor won a contract for an FPSO project 
with a large international energy company (“Customer B”).  Fluor’s responsibilities under the 
Penguins contract included engineering, design, procurement, selection of subcontractors, 
construction management, fabrication, integration, commissioning, delivery, and handover of the 
FPSO. 
 
20. The contract totaled $491.7 million, with an as-sold margin of $33.9 million.  The 
bid was based on Fluor subcontracting fabrication of the FPSO to an offshore engineering, 
procurement, and construction company (“Fabrication Subcontractor”).  This subcontract was a 
significant portion of the Penguins Project, constituting at least 25% of the cost of the overall 
contract.  Although Fluor received a binding bid from the Fabrication Subcontractor for a 
subcontract agreement, it had expired prior to Fluor submitting its final bid to Customer B.  
Accordingly, Fluor had to finalize the subcontract with the Fabrication Subcontractor after Fluor 
signed its fixed price contract with Customer B. 
 
 
 
 

 7 
The Second Quarter of 2018 Forecast Inaccurately Reported Penguins as Profitable 
 
21. In May 2018, Fluor personnel compiled forecasts reflecting the best, most likely, 
and worst case financial scenarios for the Penguins Project.  By the middle of the second quarter of 
2018, they concluded that the most likely scenario for the Penguins Project was that it “won’t be a 
break-even scenario, it will be a loss.” 
 
22. As the quarter progressed, the forecast did not improve.  In fact, toward the end of 
the second quarter of 2018, Fluor signed a subcontract with the Fabrication Subcontractor after 
months of negotiations.  The final subcontract terms were significantly more expensive to Fluor 
than anticipated the quarter before and as had been budgeted for in the contract bid.  Likewise, the 
cost of supplies, including steel, suggested the forecast could worsen from the project team’s then-
current estimate that Penguins would be a loss. 
 
23. Nevertheless, after quarter close, Fluor recorded the Penguin Project’s PGM in the 
second quarter of 2018 as $23.5 million.  This PGM was essentially unchanged from the prior 
quarter’s PGM despite significant changes in circumstances for the Penguins Project, most notably 
the subcontract price with the Fabrication Subcontractor.  That PGM was inaccurate.  Fluor later 
corrected the PGM for the second quarter of 2018 to negative $19.4 million in the Restatement.   
 
24. The exclusion of costs that were known or should have been known from the 
forecast for the Penguins Project led to misstated books and records, and ultimately resulted in 
materially misstated financial statements reported in Fluor’s Form 10-Q for the quarter ended June 
30, 2018.  Penguins was in a loss position in the second quarter of 2018, and, therefore, to be in 
accordance with U.S. GAAP, Fluor needed to recognize the full amount of the forecasted loss in its 
Net Earnings that quarter in addition to reversing previously recognized profits.  Since it did not, in 
the second quarter of 2018, Fluor overstated Net Earnings by $17 million ($20.6 million pre-tax) or 
22% and overstated the E&C Segment profit by 28%.  
 
The Third Quarter of 2018 Forecast Misstated Penguins at a Breakeven 
PGM When It was a Loss 
 
25. In the third quarter of 2018, Fluor personnel again compiled forecasts reflecting the 
best, most likely, and worst case scenarios for the Penguins Project.  In August 2018, the project 
team presented a most likely forecast scenario for the Penguins Project of over a $20 million loss.   
 
26. Fluor recorded the Penguin Project’s PGM in the third quarter of 2018 as $0.8 
million, roughly a breakeven gross margin.  Fluor continued to delay reporting the project’s loss 
this quarter, and the exclusion of costs that were known or should have been known from the 
forecasts for the Penguins Project led to misstated books and records in the third quarter of 2018.  
The most likely forecast at the time showed a loss of $19.8 million, as Fluor subsequently amended 
its financial statements to reflect in the Restatement.   
 
 
 

 8 
Violations 
 
27. As a result of the conduct described above, Fluor violated Section 13(a) of the 
Exchange Act and Rules 13a-1, 13a-13, and 12b-20 thereunder.  Section 13(a) of the Exchange Act 
requires issuers with a class of securities registered pursuant to Section 12 of the Exchange Act to 
file such periodic and other reports as the Commission may prescribe and in conformity with such 
rules as the Commission may promulgate.  Exchange Act Rules 13a-1 and 13a-13 require the filing 
of annual and quarterly reports, respectively.  The obligation to file such reports embodies the 
requirement that they be true and correct. See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 
(D.C. Cir. 1978), cert. denied, 440 U.S. 913 (1979).  In addition to the information expressly 
required to be included in such reports, Rule 12b-20 of the Exchange Act requires issuers to add 
such further material information, if any, as may be necessary to make the required statements, in 
the light of the circumstances under which they are made not misleading.   
 
28. As a result of the conduct described above, Fluor violated Section 13(b)(2)(A) of 
the Exchange Act, which requires an issuer of a security registered pursuant to Section 12 of the 
Exchange Act to make and keep books, records, and accounts which, in reasonable detail, 
accurately and fairly reflect the issuer’s transactions and disposition of assets.   
 
29. As a result of the conduct described above, Fluor violated Section 13(b)(2)(B) of 
the Exchange Act, which requires an issuer of a security registered pursuant to Section 12 of the 
Exchange Act to devise and maintain a system of internal accounting controls sufficient to provide 
reasonable assurances that: transactions are executed in accordance with management’s general 
and specific authorization; transactions are recorded as necessary to permit preparation of financial 
statements in conformity with GAAP or any other criteria applicable to such statements, and to 
maintain accountability for assets; access to assets is permitted only in accordance with 
management’s general or specific authorization; and the recorded accountability for assets is 
compared with the existing assets at reasonable intervals and appropriate action is taken with 
respect to any differences.  Fluor also violated Exchange Act Rule 13a-15(a), which requires 
issuers to maintain internal control over financial reporting as defined in Rule 13a-15(f).   
 
Undertakings 
 
30. In connection with this action and any related judicial or administrative proceeding 
or investigation commenced by the Commission or to which the Commission is a party, 
Respondent (i) agrees to appear and be interviewed by Commission staff at such times and places 
as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile 
transmission of notices or subpoenas issued by the Commission for documents or testimony at 
depositions, hearings, or trials, or in connection with any related investigation by Commission 
staff; (iii) agrees to appoint an agent to receive service of such notices and subpoenas; (iv) with 
respect to such notices and subpoenas, waives the territorial limits on service contained in Rule 45 
of the Federal Rules of Civil Procedure and any applicable local rules, provided that the party 
requesting the testimony reimburses Respondent’s travel, lodging, and subsistence expenses at the 
then-prevailing U.S. Government per diem rates; and (v) consents to personal jurisdiction over 
Respondent in any United States District Court for purposes of enforcing any such subpoena. 

 9 
31. In determining to accept Respondent’s Offer, the Commission considered remedial 
acts undertaken by Respondent, cooperation previously afforded the Commission staff, and the 
foregoing undertakings. 
 
IV. 
 
 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondent’s Offer. 
 
 Accordingly, it is hereby ORDERED that: 
 
 A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from 
committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 
13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 13a-15 thereunder.   
 
B. Respondent shall, within 10 business days of the entry of this Order, pay a civil 
money penalty in the amount of $14.5 million to the Securities and Exchange Commission.  If 
timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   
 
Payment must be made in one of the following ways:   
 
(1) Respondent may transmit payment electronically to the Commission, which 
will provide detailed ACH transfer/Fedwire instructions upon request;  
 
(2) Respondent may make direct payment from a bank account via Pay.gov 
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  
 
(3) Respondent may pay by certified check, bank cashier’s check, or United 
States postal money order, made payable to the Securities and Exchange 
Commission and hand-delivered or mailed to:  
 
Enterprise Services Center 
Accounts Receivable Branch 
HQ Bldg., Room 181, AMZ-341 
6500 South MacArthur Boulevard 
Oklahoma City, OK 73169 
 
Payments by check or money order must be accompanied by a cover letter identifying 
Fluor Corporation as a Respondent in these proceedings, and the file number of these proceedings; 
a copy of the cover letter and check or money order must be sent to Carolyn M. Welshhans, 
Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 
20549.   
 
 C.  Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is 
created for the penalties referenced in paragraph B above.  This Fair Fund may be combined with 
and/or receive funds received in proceedings arising out of the same conduct that is the subject of this 

 10 
Order.  Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 
as penalties paid to the government for all purposes, including all tax purposes.  To preserve the 
deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 
not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 
compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 
this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a Penalty 
Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 
Penalty Offset, notify the Commission's counsel in this action and pay the amount of the Penalty 
Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed an 
additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 
in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a private 
damages action brought against Respondent by or on behalf of one or more investors based on 
substantially the same facts as alleged in the Order instituted by the Commission in this 
proceeding. 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 98292 / September 6, 2023 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21610 

 

In the Matter of 

 

FLUOR CORPORATION,  

 

Respondent. 

 

ORDER INSTITUTING CEASE-AND-

DESIST PROCEEDINGS, PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASE-

AND-DESIST ORDER  

   

I. 

 

 The Securities and Exchange Commission (“Commission” or “SEC”) deems it appropriate 

that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the 

Securities Exchange Act of 1934 (“Exchange Act”) against Fluor Corporation (“Fluor” or 

“Respondent”).   

 

II. 

 

 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over the Respondent and the subject matter of 

these proceedings, which are admitted, Respondent consents to the entry of this Order Instituting 

Cease-and-Desist Proceedings, Pursuant to Section 21C of the Securities Exchange Act of 1934, 

Making Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below. 

 

III. 

 

 On the basis of this Order and Respondent’s Offer, the Commission finds1 that  

 

 
1 The findings herein are made pursuant to Respondent’s Offer of Settlement and are not binding 

on any other person or entity in this or any other proceeding.  



 2 

Summary 

 

1. This matter involves deficiencies in Fluor’s accounting over a period of years for 

two fixed-price construction projects on which Fluor carried a risk of cost overruns with respect to 

work within the contract’s scope.  Fluor bid on these projects, relying on overly optimistic cost and 

timing estimates.  Following each project’s contract award, Fluor experienced cost overruns that 

worsened over time.  Yet, Fluor failed to maintain a system of internal accounting controls 

sufficient to account for these contracts in accordance with U.S. Generally Accepted Accounting 

Principles (“GAAP”).  These failings resulted in inaccurate books and records and ultimately in 

materially misstated financial statements included in periodic reports filed with the SEC. 

 

2. In August 2019, Fluor announced $714 million in pre-tax charges stemming from an 

“operational and strategic review” of sixteen projects.  These included a project requiring Fluor to 

validate and complete the design and to build a one-of-a-kind U.S. Army facility for manufacturing 

nitrocellulose, an ammunition propellant, (“Radford” or the “Radford Project”), and a project 

requiring Fluor to design and build a Floating Production Storage and Offloading (“FPSO”) facility 

for delivery to the Penguins oil and gas field located in the North Sea (“Penguins” or the “Penguins 

Project”).   

   

3. Prompted by the SEC staff’s investigation, Fluor undertook an internal investigation 

in 2020 that identified material weaknesses in its internal control over financial reporting and 

material errors in its financial statements, and resulted in Fluor restating its annual and quarterly 

financial statements for its fiscal year 2016 through the third quarter of 2019, as disclosed in its 

2019 Form 10-K filed with the SEC on September 25, 2020 (the “Restatement”).  The material 

weaknesses identified in the Restatement were attributable to control failures associated with the 

Radford and Penguins projects, which resulted in material errors.  Throughout the fiscal year ended 

December 31, 2016 through the first quarter ended March 31, 2019 (“Relevant Period”), Fluor’s 

accounting issues on Radford resulted in materially overstated net earnings in Fluor’s reported 

financial statements.  Fluor overstated its annual net earnings by $51 million (22%) in 2016, by $38 

million (25%) in 2017, and $43 million (25%) in 2018, and understated its net loss by $3 million 

(5%) in the first quarter of 2019.  On the Penguins Project, Fluor’s delayed recognition of its loss for 

two quarters resulted in Fluor overstating its net earnings by $17 million (22%) in the second 

quarter of 2018.  

 

4. As a result of conduct detailed herein, Fluor violated Sections 13(a), 13(b)(2)(A), 

and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, 13a-15(a), and 12b-20 thereunder. 

 

Respondent 

 

5. Fluor Corporation is a Delaware corporation with its principal place of business in 

Irving, Texas.  Since registering its common stock with the SEC under Section 12(b) of the 

Exchange Act in 2000, Fluor has been required to file periodic reports on Forms 10-K and 10-Q 

with the SEC pursuant to Section 13(a) of the Exchange Act and related rules thereunder.  During 

the Relevant Period, the stock traded on the New York Stock Exchange under the ticker symbol 

“FLR.”  Fluor performs engineering, procurement, and construction services worldwide and 



 3 

operates through business segments, which, during the Relevant Period, included the two segments 

responsible for Radford and Penguins, respectively known as the Fluor Government Group 

(“FGG”) and Energy & Chemicals (“E&C”).   

 

Background 

 

6. Under GAAP, Fluor accounted for its fixed-price projects Radford and Penguins 

using the percentage of completion (“POC”) method, whereby it was required to periodically 

recognize a project’s costs as incurred and the revenue as a percentage of the work completed to 

date.  Under this method, for each reporting period, a project team develops dependable estimates 

of expected total revenues, total costs, and total project gross margin (“PGM”) to arrive at a 

project’s financial forecast (known as the Estimate at Completion or “EAC”).  A project must 

recognize the entire amount of an anticipated loss as soon as the loss becomes evident. 

 

7. To periodically record a project’s EAC, Fluor required use of the Project Margin 

Analysis Report (“PMAR”), which should document project management’s most likely current 

estimate of the project’s revenue, cost, and PGM forecast.  Fluor required key personnel to certify 

PMAR accuracy quarterly.  On the Radford Project, Fluor failed to maintain adequate internal 

controls over the PMAR process.  Although Fluor’s accounting policy required the project team to 

determine the most likely EAC, it failed to maintain this control during the Relevant Period, as 

personnel failed to include all costs that were known or should have been known and, from the 

period ending December 31, 2017 through March 31, 2019, improperly included revenue from 

unapproved change orders in the accounting for Radford’s EAC.   

 

8. Similarly, Fluor failed to maintain sufficient internal accounting controls over the 

PMAR process on the Penguins Project.  Moreover, costs that were known or should have been 

known were excluded from the EAC in the second and third quarters of 2018.      

 

Radford Project 

 

9. In December 2015, Fluor finalized a $245 million fixed price subcontract with its 

customer (“Customer A”) for the Radford Project to validate and complete the design and to build 

the Radford Project.  As part of the scope of work, Fluor was provided an incomplete design from 

the prior, terminated subcontractor (“Prior Design”) that it was required to validate and complete 

when performing the subcontract.  Fluor was told during the bidding process that agreeing to 

validate and complete the facility’s design was risky because FGG personnel did not know the 

Prior Design’s quality or completeness.  By early 2016, certain Fluor personnel realized that the 

incomplete and flawed Prior Design was causing significant additional cost and delay on the 

Radford Project.   

 

 Costs that Were Known or Should Have Been Known Were  

Improperly Excluded from the EAC 

 

10. During the Relevant Period, the difference between the subcontract price and the 

anticipated total cost of the Radford Project grew significantly as delays and cost overruns 



 4 

worsened.  The growing anticipated total costs over the subcontract price should have prompted 

Fluor to revise the EAC to reflect all the additional anticipated costs.  Instead, Fluor improperly 

excluded certain such costs from the total cost estimate in the EAC.  Generally, Fluor personnel 

added costs to the EAC only to the extent that the costs could be offset by corresponding added 

forecasted revenues, which were determined using overly high assumed rates of recovery, as 

described below. 

 

11. As a result, Fluor’s forecasted cost in the EAC remained artificially low and 

delayed loss recognition.  Fluor’s failure to maintain sufficient internal accounting controls 

governing the PMAR process contributed to this result.   

 

Revenues from Change Orders Were Improperly Included in the Forecast 

 

12. From year-end 2017 through the first quarter of 2019, to address the growing 

anticipated total cost over the original subcontract price, Fluor personnel determined to develop 

and submit change orders, also known as Project Change Notices (“PCNs”).  PCNs are proposed 

modifications of a contract that change the price or scope of work of the contract, or both.  Fluor 

personnel developed PCNs for submission to Customer A for approval.  Fluor then forecasted 

additional revenue from the PCNs using overly high rates of assumed cost recovery on the PCNs, 

including for unapproved PCNs.  As a result, this revenue offset additional forecasted costs and 

minimized the adverse impact on the PGM.  The amount of unapproved PCNs, including rejected 

and not yet submitted PCNs, in the forecast increased during the Relevant Period, but Fluor’s 

actual rates of recovery from approved PCNs remained low, as reflected below: 

 
Radford Project 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 1Q 2019 

Unapproved PCNs in revenue 

forecast, net of profit fee  
$47M  $68M  $69M  $68M  $118M $132M  

Assumed recovery rate of net PCN 

revenue in revenue forecast  
100% 100% 90% 80% 80% 78% 

Percent of total PCN revenue 

actually approved by Customer A 
4.5% 3.9% 3.4% 2.4% 3.9% 6.1% 

 

13. Through fiscal year-end 2017, Fluor was required to record revenue for unapproved 

PCNs under POC accounting in compliance with ASC Subtopic 605-35, Construction-Type and 

Production-Type Contracts (“ASC 605-35”), and could only record it if recovery of the additional 

revenue was deemed probable.  Under ASC 605-35, a PCN should be evaluated as a “claim” if it 

was a change order in dispute or unapproved as to both scope and price.  Revenue recognition for a 

claim under ASC 605-35 required a heightened level of evidence to demonstrate probable 

recovery.  For the fiscal year ended December 31, 2017, even though the relevant PCNs were 

either in dispute or were unapproved as to price and scope, Fluor wrongly categorized them as 

unpriced change orders, instead of claims.  As a result, Fluor did not obtain sufficient evidence to 

demonstrate probable recovery of the PCNs under ASC 605. 

 

14. In the first quarter of 2018, Fluor adopted ASC 606, Revenue from Contracts with 

Customers (“ASC 606”), which superseded the revenue recognition requirements in ASC 605.  



 5 

Under ASC 606, Fluor could only include the unapproved PCNs in the revenue forecast if Fluor 

had an enforceable contractual right to additional revenue beyond the fixed contractual price, 

considering all relevant facts and circumstances, including the terms of the contract.  From the first 

quarter of 2018 through the end of the Relevant Period, Fluor did not sufficiently evaluate under 

ASC 606 if it had an enforceable contractual right to the unapproved PCNs.  Without such an 

evaluation, it was improper to include revenue from the unapproved PCNs in its forecast.  Even if 

Fluor had sufficiently evaluated under ASC 606 whether it had an enforceable contractual right to 

the unapproved PCNs, it was only permitted to increase forecast revenue to the extent it was 

probable that a significant reversal in the amount of cumulative revenue recognized would not 

occur, weighing factors such as the limited predictive value from Fluor’s prior experience given 

the low recovery rates, the length of time it would take to resolve and susceptibility to the 

judgment of third-parties.  But Fluor lacked sufficient evidence of it being probable under ASC 

606 that a significant reversal of revenue would not occur for unapproved PCNs.  

   

15. Fluor personnel prepared documentation to support the Radford accounting for 

year-end 2017, year-end 2018, and the first quarter of 2019.  This control activity’s objective was 

to document the facts and analysis supporting revenue estimates on projects with significant risks 

and judgments, in accordance with GAAP.  This documentation did not adequately support Fluor’s 

enforceable right to the revenue and failed to support that recovery from Customer A was 

probable.  Fluor stated that it was entitled to payment because Customer A misrepresented the 

status of the Prior Design.  But, it was not probable under GAAP that Fluor would recover 

money from Customer A to pay for the delays and design issues underlying the majority of 

PCNs.  Rather, throughout the Relevant Period, Customer A rejected most PCNs, blamed Fluor 

for the design problems, and maintained that Fluor was responsible for the additional costs under 

the terms of the existing fixed-price contract.  Fluor did not obtain objective evidence to support 

recording the revenue during the Relevant Period. 

 

16. For example, for year-end 2017, in support of its assumed 100% recovery, Fluor 

largely relied on the assertion that a Customer A employee allegedly “verbally acknowledged 

[Customer A’s] responsibility for” the PCNs.  In fact, the Customer A employee said that 

Customer A would undertake a revamped process to assess PCNs, not that it would approve or 

pay for any individual PCN.  

 

Impact on Fluor’s Financial Statements 

 

17. As of year-end 2016, the Radford Project was, in reality, operating at a loss.  

Fluor’s improper exclusion of costs that were known or should have been known led to inaccurate 

books and records during the reporting period ended December 31, 2016.  Fluor’s improper 

inclusion of the unapproved PCN revenue and the continuing improper exclusion of anticipated 

costs that were known or should have been known resulted in inaccurate books and records in 

reporting periods from year-end 2017 through the first quarter of 2019.  As a result of the errors 

described above, Fluor materially misstated its net earnings in periodic reports filed with the SEC 

as follows:  

 



 6 

Reporting Period Overstated Net Earnings 

 

As % of Reported Net 

Earnings (Loss) 

2016 (annual) $50.9 million 22% 

2017 (annual) $38.4 million 25% 

Q1 2018 $8.7 million (33%) 

Q2 2018 $7.5 million 10% 

Q3 2018 $8.8 million 12% 

Q4 2018 $17.8 million 37% 

2018 (annual) $42.8 million 25% 

Q1 2019 $3.3 million (5%) 

 

Fluor corrected the foregoing errors in the amended financial statements included in the 

Restatement. 

 

18. Additionally, Fluor’s 2018 Form 10-K and the Form 10-Q for the first quarter of 

2019 included a materially misstated disclosure regarding Radford PCNs: “The company’s 

[Radford] forecast is based on its assessment of the probable resolution of certain change orders 

submitted to the client which are currently under discussion, and if not achieved, could adversely 

affect revenue and segment profit.”  This was a misstatement because many PCNs were not “under 

discussion,” but either formally rejected or not yet submitted, and it failed to note that lack of 

favorable resolution on the PCNs could have a material adverse effect on revenue and 

consolidated profit due to the large value of those PCNs.  Finally, the disclosure omitted the 

amount of the unapproved PCNs, which was required under GAAP, specifically ASC 910-20-50-1, 

and SEC Regulation S-X Rule 5-02.3(c)(3).  

 

Penguins Project 

 

19.   In December 2017, the E&C segment of Fluor won a contract for an FPSO project 

with a large international energy company (“Customer B”).  Fluor’s responsibilities under the 

Penguins contract included engineering, design, procurement, selection of subcontractors, 

construction management, fabrication, integration, commissioning, delivery, and handover of the 

FPSO. 

 

20. The contract totaled $491.7 million, with an as-sold margin of $33.9 million.  The 

bid was based on Fluor subcontracting fabrication of the FPSO to an offshore engineering, 

procurement, and construction company (“Fabrication Subcontractor”).  This subcontract was a 

significant portion of the Penguins Project, constituting at least 25% of the cost of the overall 

contract.  Although Fluor received a binding bid from the Fabrication Subcontractor for a 

subcontract agreement, it had expired prior to Fluor submitting its final bid to Customer B.  

Accordingly, Fluor had to finalize the subcontract with the Fabrication Subcontractor after Fluor 

signed its fixed price contract with Customer B. 

 

 

 

 



 7 

The Second Quarter of 2018 Forecast Inaccurately Reported Penguins as Profitable 

 

21. In May 2018, Fluor personnel compiled forecasts reflecting the best, most likely, 

and worst case financial scenarios for the Penguins Project.  By the middle of the second quarter of 

2018, they concluded that the most likely scenario for the Penguins Project was that it “won’t be a 

break-even scenario, it will be a loss.” 

 

22. As the quarter progressed, the forecast did not improve.  In fact, toward the end of 

the second quarter of 2018, Fluor signed a subcontract with the Fabrication Subcontractor after 

months of negotiations.  The final subcontract terms were significantly more expensive to Fluor 

than anticipated the quarter before and as had been budgeted for in the contract bid.  Likewise, the 

cost of supplies, including steel, suggested the forecast could worsen from the project team’s then-

current estimate that Penguins would be a loss. 

 

23. Nevertheless, after quarter close, Fluor recorded the Penguin Project’s PGM in the 

second quarter of 2018 as $23.5 million.  This PGM was essentially unchanged from the prior 

quarter’s PGM despite significant changes in circumstances for the Penguins Project, most notably 

the subcontract price with the Fabrication Subcontractor.  That PGM was inaccurate.  Fluor later 

corrected the PGM for the second quarter of 2018 to negative $19.4 million in the Restatement.   

 

24. The exclusion of costs that were known or should have been known from the 

forecast for the Penguins Project led to misstated books and records, and ultimately resulted in 

materially misstated financial statements reported in Fluor’s Form 10-Q for the quarter ended June 

30, 2018.  Penguins was in a loss position in the second quarter of 2018, and, therefore, to be in 

accordance with U.S. GAAP, Fluor needed to recognize the full amount of the forecasted loss in its 

Net Earnings that quarter in addition to reversing previously recognized profits.  Since it did not, in 

the second quarter of 2018, Fluor overstated Net Earnings by $17 million ($20.6 million pre-tax) or 

22% and overstated the E&C Segment profit by 28%.  

 

The Third Quarter of 2018 Forecast Misstated Penguins at a Breakeven 

PGM When It was a Loss 

 

25. In the third quarter of 2018, Fluor personnel again compiled forecasts reflecting the 

best, most likely, and worst case scenarios for the Penguins Project.  In August 2018, the project 

team presented a most likely forecast scenario for the Penguins Project of over a $20 million loss.   

 

26. Fluor recorded the Penguin Project’s PGM in the third quarter of 2018 as $0.8 

million, roughly a breakeven gross margin.  Fluor continued to delay reporting the project’s loss 

this quarter, and the exclusion of costs that were known or should have been known from the 

forecasts for the Penguins Project led to misstated books and records in the third quarter of 2018.  

The most likely forecast at the time showed a loss of $19.8 million, as Fluor subsequently amended 

its financial statements to reflect in the Restatement.   

 

 

 



 8 

Violations 

 

27. As a result of the conduct described above, Fluor violated Section 13(a) of the 

Exchange Act and Rules 13a-1, 13a-13, and 12b-20 thereunder.  Section 13(a) of the Exchange Act 

requires issuers with a class of securities registered pursuant to Section 12 of the Exchange Act to 

file such periodic and other reports as the Commission may prescribe and in conformity with such 

rules as the Commission may promulgate.  Exchange Act Rules 13a-1 and 13a-13 require the filing 

of annual and quarterly reports, respectively.  The obligation to file such reports embodies the 

requirement that they be true and correct. See, e.g., SEC v. Savoy Indus., Inc., 587 F.2d 1149, 1165 

(D.C. Cir. 1978), cert. denied, 440 U.S. 913 (1979).  In addition to the information expressly 

required to be included in such reports, Rule 12b-20 of the Exchange Act requires issuers to add 

such further material information, if any, as may be necessary to make the required statements, in 

the light of the circumstances under which they are made not misleading.   

 

28. As a result of the conduct described above, Fluor violated Section 13(b)(2)(A) of 

the Exchange Act, which requires an issuer of a security registered pursuant to Section 12 of the 

Exchange Act to make and keep books, records, and accounts which, in reasonable detail, 

accurately and fairly reflect the issuer’s transactions and disposition of assets.   

 

29. As a result of the conduct described above, Fluor violated Section 13(b)(2)(B) of 

the Exchange Act, which requires an issuer of a security registered pursuant to Section 12 of the 

Exchange Act to devise and maintain a system of internal accounting controls sufficient to provide 

reasonable assurances that: transactions are executed in accordance with management’s general 

and specific authorization; transactions are recorded as necessary to permit preparation of financial 

statements in conformity with GAAP or any other criteria applicable to such statements, and to 

maintain accountability for assets; access to assets is permitted only in accordance with 

management’s general or specific authorization; and the recorded accountability for assets is 

compared with the existing assets at reasonable intervals and appropriate action is taken with 

respect to any differences.  Fluor also violated Exchange Act Rule 13a-15(a), which requires 

issuers to maintain internal control over financial reporting as defined in Rule 13a-15(f).   

 

Undertakings 

 

30. In connection with this action and any related judicial or administrative proceeding 

or investigation commenced by the Commission or to which the Commission is a party, 

Respondent (i) agrees to appear and be interviewed by Commission staff at such times and places 

as the staff requests upon reasonable notice; (ii) will accept service by mail or facsimile 

transmission of notices or subpoenas issued by the Commission for documents or testimony at 

depositions, hearings, or trials, or in connection with any related investigation by Commission 

staff; (iii) agrees to appoint an agent to receive service of such notices and subpoenas; (iv) with 

respect to such notices and subpoenas, waives the territorial limits on service contained in Rule 45 

of the Federal Rules of Civil Procedure and any applicable local rules, provided that the party 

requesting the testimony reimburses Respondent’s travel, lodging, and subsistence expenses at the 

then-prevailing U.S. Government per diem rates; and (v) consents to personal jurisdiction over 

Respondent in any United States District Court for purposes of enforcing any such subpoena. 



 9 

31. In determining to accept Respondent’s Offer, the Commission considered remedial 

acts undertaken by Respondent, cooperation previously afforded the Commission staff, and the 

foregoing undertakings. 

 

IV. 

 

 In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent’s Offer. 

 

 Accordingly, it is hereby ORDERED that: 

 

 A. Pursuant to Section 21C of the Exchange Act, Respondent cease and desist from 

committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), and 

13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 13a-15 thereunder.   

 

B. Respondent shall, within 10 business days of the entry of this Order, pay a civil 

money penalty in the amount of $14.5 million to the Securities and Exchange Commission.  If 

timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717.   

 

Payment must be made in one of the following ways:   

 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request;  

 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or  

 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to:  

 

Enterprise Services Center 

Accounts Receivable Branch 

HQ Bldg., Room 181, AMZ-341 

6500 South MacArthur Boulevard 

Oklahoma City, OK 73169 

 

Payments by check or money order must be accompanied by a cover letter identifying 

Fluor Corporation as a Respondent in these proceedings, and the file number of these proceedings; 

a copy of the cover letter and check or money order must be sent to Carolyn M. Welshhans, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549.   

 

 C.  Pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, a Fair Fund is 

created for the penalties referenced in paragraph B above.  This Fair Fund may be combined with 

and/or receive funds received in proceedings arising out of the same conduct that is the subject of this 

http://www.sec.gov/about/offices/ofm.htm


 10 

Order.  Amounts ordered to be paid as civil money penalties pursuant to this Order shall be treated 

as penalties paid to the government for all purposes, including all tax purposes.  To preserve the 

deterrent effect of the civil penalty, Respondent agrees that in any Related Investor Action, it shall 

not argue that it is entitled to, nor shall it benefit by, offset or reduction of any award of 

compensatory damages by the amount of any part of Respondent’s payment of a civil penalty in 

this action (“Penalty Offset”).  If the court in any Related Investor Action grants such a Penalty 

Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting the 

Penalty Offset, notify the Commission's counsel in this action and pay the amount of the Penalty 

Offset to the Securities and Exchange Commission.  Such a payment shall not be deemed an 

additional civil penalty and shall not be deemed to change the amount of the civil penalty imposed 

in this proceeding.  For purposes of this paragraph, a “Related Investor Action” means a private 

damages action brought against Respondent by or on behalf of one or more investors based on 

substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding. 

 

 By the Commission. 

 

 

 

Vanessa A. Countryman 

Secretary