In re ROBIN K. CHOPRA

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 UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 98295 / September 6, 2023 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-21614 
 
In the Matter of 
 
 ROBIN K. CHOPRA, CA 
 
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 Robin K. Chopra (“Chopra” 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, and except as provided herein in Section V, 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 stems from Chopra’s involvement in Fluor Corporation’s (“Fluor”) 
percentage of completion (“POC”) accounting for a fixed-price construction project on which Fluor 
served as the subcontractor and carried a risk of cost overruns with respect to work within the 
contract’s scope.   
 
2. The project required 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”).  In 2015, Fluor submitted a bid on the Radford Project, relying on overly 
optimistic cost and timing estimates.  Following the Radford Project’s subcontract award, Fluor 
experienced cost overruns that worsened over time. 
 
3. From the fiscal year ended December 31, 2017 through the quarter ending March 
31, 2019 (“Relevant Period”), Chopra, as Senior Vice President, Controller, and Chief Accounting 
Officer (“CAO”) of Fluor, accepted financial estimates for Radford from Fluor personnel.  He 
should have known that these financial estimates caused materially overstated revenue to be 
recorded on Fluor’s books and records.  The result was that the overstated revenue kept the project 
forecast from a loss position.  Further, in support of the foregoing, Chopra directed Radford Project 
personnel to prepare documentation required by Fluor’s internal accounting controls that Chopra, 
among others, reviewed and commented on, and which reflected the incorrect revenue estimates 
and overstated revenue.  Chopra thereby was a cause of Fluor’s failure to maintain a system of 
internal accounting controls sufficient to account for the Radford contract in accordance with U.S. 
Generally Accepted Accounting Principles (“GAAP”).  These failings resulted in Fluor’s 
maintaining inaccurate books and records and ultimately Fluor including materially misstated 
financial statements in periodic reports filed with the SEC that Chopra signed.  Chopra was a cause 
of Fluor’s filing these materially inaccurate financial statements in its periodic reports for the fiscal 
year ended December 31, 2017 through the quarter ending March 31, 2019.   
 
4. In August 2019, Fluor announced $714 million in pre-tax charges stemming from an 
“operational and strategic review” of sixteen projects, including Radford.  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 in part to control failures associated with the Radford Project, which resulted in 
material errors.  Throughout the Relevant Period, Fluor’s accounting issues on Radford resulted in 
materially overstated net earnings in Fluor’s reported financial statements.  Regarding the Radford 
Project, Fluor overstated its annual net earnings 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.   
 
5. As a result of conduct detailed herein, Chopra was a cause of Fluor’s violations of 
Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, and 
12b-20 thereunder. 

 3 
Respondent 
 
6. Robin K. Chopra, age 58, is a resident of England.  Chopra joined Fluor in 1991.  In 
2016, Chopra became the Senior Vice President, Controller, and CAO of Fluor, positions which he 
held until taking a leave of absence in June 2020 and resigning from the company in February 2021.  
Chopra is a Chartered Accountant in the United Kingdom.  He has never been registered with the 
Commission in any capacity.  
 
Relevant Entity 
 
7. 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 
operates through business segments, including the Fluor Government Group (“FGG”), the segment 
responsible for the Radford Project.  
Background 
 
8. Under GAAP, Fluor accounted for its fixed-price projects using the percentage of 
completion (“POC”) method, whereby it was required to periodically recognize the 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. 
 
9. 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’s internal accounting controls 
required that Chopra, as the CAO, provide sub-certifications to the Chief Executive Officer 
(“CEO”) and Chief Financial Officer (“CFO”) as certifiers of Fluor’s financial statements.  
Chopra, as CAO, also provided Controller Updates, which incorporated information he obtained 
from others, to Fluor’s audit committee summarizing the significant accounting determinations and 
management representation letters attesting to the accuracy of the project forecasts and compliance 
with the applicable GAAP and Fluor’s policies.    
 
Radford Project 
 
10. In December 2015, Fluor finalized a $245 million fixed price subcontract with its 
customer (“Customer”) for the Radford Project to validate and complete the design and 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.   

 4 
 
11. 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 
worsened.  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 the Customer for 
approval.   
 
12. 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.   
 
13. Chopra, among others, accepted FGG’s categorizing the PCNs as unpriced change 
orders, when they should have been categorized as claims.  He also accepted, as did others, FGG’s 
inclusion of additional revenue in the project forecast from the unapproved PCNs, including 
rejected and not yet submitted PCNs, using overly high rates of assumed cost recovery on the 
PCNs.   As a result, this revenue offset additional forecasted costs and minimized the adverse 
impact on the PGM.  The amount of unapproved 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 
4.5% 3.9% 3.4% 2.4% 3.9% 6.1% 
   
14. Chopra requested that Fluor personnel prepare documentation to support the 
Radford accounting for fiscal year-end 2017.  The objective of this control activity, which Chopra 
introduced to Fluor, was to document the facts and analysis supporting revenue estimates on 
projects with significant risks and judgments, in accordance with GAAP.  Fluor stated that it was 
entitled to payment because the Customer misrepresented the status of the Prior Design.  But it 
was not probable Fluor would recover money from the Customer to pay for the delays and design 
issues underlying the majority of PCNs at the assumed 100% recovery rate.  Rather, throughout 
the Relevant Period, the Customer 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 

 5 
fixed-price contract.  Fluor never obtained, nor was Chopra ever apprised of, sufficient evidence 
to support recording the revenue on the PCNs.  
 
15. For fiscal year-end 2017, in support of its assumed 100% recovery, Fluor relied 
on the assertion that a Customer employee allegedly “verbally acknowledged [Customer’s] 
responsibility for these changes and agreed to reconsider all rejected change orders, as well as 
begin reviewing and negotiating all PCNs with Fluor in late February.”  Despite Chopra’s 
questions about the basis for the probability determination, Chopra was not provided with 
sufficient evidence to support revenue in addition to the contract amount in the face of the 
Customer’s resistance to paying for the PCNs.  In fact, the Customer employee said that the 
Customer would undertake a revamped process to assess PCNs, not that it would approve or pay 
for any individual PCN.    
 
16. 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.  
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 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 Chopra, as Fluor’s CAO, did not have sufficient evidence of it being probable 
under ASC 606 that a significant reversal would not occur for unapproved PCNs.  
 
17. Chopra again requested that Fluor personnel prepare documentation to support the 
Radford accounting for fiscal year-end 2018, and the first quarter of 2019.  This documentation did 
not adequately support Fluor’s enforceable right to the revenue and failed to support that recovery 
from the Customer was probable.  
 
18. For fiscal year-end 2018 and for the first quarter of 2019, Fluor personnel justified 
the assumed recovery rates based on the Customer’s approvals of a subset of monetarily small 
PCNs that were considered “less contentious” than the vast majority of outstanding PCNs.  This 
was incorrect, particularly because, in January 2019, the Customer rejected $54 million of the 
large and contentious PCNs and, additionally, Fluor’s central arguments on entitlement to the 
revenue.  In turn, Chopra questioned how the revenue from these PCNs could continue to be 
included in the revenue, in light of the rejections.  In response, to support of the probability 
determination, the requested documentation for year-end 2018 and the first quarter of 2019 
asserted that the rejections were the Customer’s initial negotiation position.  Chopra accepted 
this, even though this was inconsistent with other facts of which he was aware.   
 

 6 
19. Additionally, for Fluor’s 2018 Form 10-K and the Form 10-Q for the first quarter of 
2019, Chopra helped draft 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.”  Chopra should have known this was a 
material misstatement because many PCNs were not “under discussion,” but rather either formally 
rejected or not yet submitted, and that the statement 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, Chopra should have known the disclosure omitted the amount 
of the unapproved PCNs, which was required under GAAP and SEC regulations, specifically ASC 
910-20-50-1, and SEC Regulation S-X Rule 5-02.3(c)(3).  
 
20. As the CAO, Chopra signed the periodic SEC filings during the Relevant Period. 
Chopra also signed management representation letters for each reporting period during the 
Relevant Period, representing that management expected to recover revenue for unapproved 
change orders in Radford’s forecast.  Chopra also signed sub-certifications to Fluor’s CEO and 
CFO, for the Relevant Period, representing that, among other things, the financial information was 
prompted by and based on facts and circumstances which were in evidence in the relevant quarter. 
 
21. The conduct described above resulted in inaccurate books and records in the 
Relevant Period.  Chopra had information that he should have known indicated that the assumed 
rate of recovery for the PCNs revenue was too high.  While engaging in the foregoing, Chopra was 
a cause of Fluor improperly including revenue for Radford unapproved PCNs in the total revenue 
forecast, which kept the project forecast from loss positions that should have been recognized.  As a 
result of the correction of these errors, revenues for Radford were reduced in the Restatement as 
follows:  
 
Reporting Period Restatement Reduction in  
Revenues Recognized 
Restatement Reduction in  
Radford Forecast Revenues  
2017 (annual) $19.3 million $46.7 million 
Q1 2018 10.1  million $65.9 million 
Q2 2018 $9.4 million $62.1 million 
Q3 2018 $11.8 million $66.7 million 
Q4 2018 $14.0 million $115.2 million 
2018 (annual) $45.3 million $115.2 million 
Q1 2019 $9.5 million $123.5 million 
 
Violations 
 
22. As a result of the conduct described above, Chopra was a cause of Fluor’s 
violations of 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 

 7 
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.  
 
23. As a result of the conduct described above, Chopra was a cause of Fluor’s 
violations of 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.   
 
24. As a result of the conduct described above, Chopra was a cause of Fluor’s 
violations of 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.   
 
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), an 
13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.   
 
B. Respondent shall, within 10 business days of the entry of this Order, pay a civil 
money penalty in the amount of $15,000 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;  
 

 8 
(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 
Robin K. Chopra 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 
the Fair Fund created in In the Matter of Fluor Corporation, AP File No. 3-21610.  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. 
 
V. 
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 
amounts due by Respondent under this Order or any other judgment, order, consent order, decree  
 
 
 

 9 
 
or settlement agreement entered in connection with this proceeding, is a debt for the violation by 
Respondent of the federal securities laws or any regulation or order issued under such laws, as set 
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 
 
 By the Commission. 
 
 
Vanessa A. Countryman 
Secretary 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 

 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 98295 / September 6, 2023 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-21614 

 

In the Matter of 

 

 ROBIN K. CHOPRA, CA 

 

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 Robin K. Chopra (“Chopra” 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, and except as provided herein in Section V, 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 stems from Chopra’s involvement in Fluor Corporation’s (“Fluor”) 

percentage of completion (“POC”) accounting for a fixed-price construction project on which Fluor 

served as the subcontractor and carried a risk of cost overruns with respect to work within the 

contract’s scope.   

 

2. The project required 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”).  In 2015, Fluor submitted a bid on the Radford Project, relying on overly 

optimistic cost and timing estimates.  Following the Radford Project’s subcontract award, Fluor 

experienced cost overruns that worsened over time. 

 

3. From the fiscal year ended December 31, 2017 through the quarter ending March 

31, 2019 (“Relevant Period”), Chopra, as Senior Vice President, Controller, and Chief Accounting 

Officer (“CAO”) of Fluor, accepted financial estimates for Radford from Fluor personnel.  He 

should have known that these financial estimates caused materially overstated revenue to be 

recorded on Fluor’s books and records.  The result was that the overstated revenue kept the project 

forecast from a loss position.  Further, in support of the foregoing, Chopra directed Radford Project 

personnel to prepare documentation required by Fluor’s internal accounting controls that Chopra, 

among others, reviewed and commented on, and which reflected the incorrect revenue estimates 

and overstated revenue.  Chopra thereby was a cause of Fluor’s failure to maintain a system of 

internal accounting controls sufficient to account for the Radford contract in accordance with U.S. 

Generally Accepted Accounting Principles (“GAAP”).  These failings resulted in Fluor’s 

maintaining inaccurate books and records and ultimately Fluor including materially misstated 

financial statements in periodic reports filed with the SEC that Chopra signed.  Chopra was a cause 

of Fluor’s filing these materially inaccurate financial statements in its periodic reports for the fiscal 

year ended December 31, 2017 through the quarter ending March 31, 2019.   

 

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

“operational and strategic review” of sixteen projects, including Radford.  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 in part to control failures associated with the Radford Project, which resulted in 

material errors.  Throughout the Relevant Period, Fluor’s accounting issues on Radford resulted in 

materially overstated net earnings in Fluor’s reported financial statements.  Regarding the Radford 

Project, Fluor overstated its annual net earnings 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.   

 

5. As a result of conduct detailed herein, Chopra was a cause of Fluor’s violations of 

Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 13a-1, 13a-13, and 

12b-20 thereunder. 



 3 

Respondent 

 

6. Robin K. Chopra, age 58, is a resident of England.  Chopra joined Fluor in 1991.  In 

2016, Chopra became the Senior Vice President, Controller, and CAO of Fluor, positions which he 

held until taking a leave of absence in June 2020 and resigning from the company in February 2021.  

Chopra is a Chartered Accountant in the United Kingdom.  He has never been registered with the 

Commission in any capacity.  

 

Relevant Entity 

 

7. 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 

operates through business segments, including the Fluor Government Group (“FGG”), the segment 

responsible for the Radford Project.  

Background 

 

8. Under GAAP, Fluor accounted for its fixed-price projects using the percentage of 

completion (“POC”) method, whereby it was required to periodically recognize the 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. 

 

9. 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’s internal accounting controls 

required that Chopra, as the CAO, provide sub-certifications to the Chief Executive Officer 

(“CEO”) and Chief Financial Officer (“CFO”) as certifiers of Fluor’s financial statements.  

Chopra, as CAO, also provided Controller Updates, which incorporated information he obtained 

from others, to Fluor’s audit committee summarizing the significant accounting determinations and 

management representation letters attesting to the accuracy of the project forecasts and compliance 

with the applicable GAAP and Fluor’s policies.    

 

Radford Project 

 

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

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



 4 

 

11. 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 

worsened.  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 the Customer for 

approval.   

 

12. 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.   

 

13. Chopra, among others, accepted FGG’s categorizing the PCNs as unpriced change 

orders, when they should have been categorized as claims.  He also accepted, as did others, FGG’s 

inclusion of additional revenue in the project forecast from the unapproved PCNs, including 

rejected and not yet submitted PCNs, using overly high rates of assumed cost recovery on the 

PCNs.   As a result, this revenue offset additional forecasted costs and minimized the adverse 

impact on the PGM.  The amount of unapproved 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 
4.5% 3.9% 3.4% 2.4% 3.9% 6.1% 

   

14. Chopra requested that Fluor personnel prepare documentation to support the 

Radford accounting for fiscal year-end 2017.  The objective of this control activity, which Chopra 

introduced to Fluor, was to document the facts and analysis supporting revenue estimates on 

projects with significant risks and judgments, in accordance with GAAP.  Fluor stated that it was 

entitled to payment because the Customer misrepresented the status of the Prior Design.  But it 

was not probable Fluor would recover money from the Customer to pay for the delays and design 

issues underlying the majority of PCNs at the assumed 100% recovery rate.  Rather, throughout 

the Relevant Period, the Customer 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 



 5 

fixed-price contract.  Fluor never obtained, nor was Chopra ever apprised of, sufficient evidence 

to support recording the revenue on the PCNs.  

 

15. For fiscal year-end 2017, in support of its assumed 100% recovery, Fluor relied 

on the assertion that a Customer employee allegedly “verbally acknowledged [Customer’s] 

responsibility for these changes and agreed to reconsider all rejected change orders, as well as 

begin reviewing and negotiating all PCNs with Fluor in late February.”  Despite Chopra’s 

questions about the basis for the probability determination, Chopra was not provided with 

sufficient evidence to support revenue in addition to the contract amount in the face of the 

Customer’s resistance to paying for the PCNs.  In fact, the Customer employee said that the 

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

for any individual PCN.    

 

16. 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.  

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 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 Chopra, as Fluor’s CAO, did not have sufficient evidence of it being probable 

under ASC 606 that a significant reversal would not occur for unapproved PCNs.  

 

17. Chopra again requested that Fluor personnel prepare documentation to support the 

Radford accounting for fiscal year-end 2018, and the first quarter of 2019.  This documentation did 

not adequately support Fluor’s enforceable right to the revenue and failed to support that recovery 

from the Customer was probable.  

 

18. For fiscal year-end 2018 and for the first quarter of 2019, Fluor personnel justified 

the assumed recovery rates based on the Customer’s approvals of a subset of monetarily small 

PCNs that were considered “less contentious” than the vast majority of outstanding PCNs.  This 

was incorrect, particularly because, in January 2019, the Customer rejected $54 million of the 

large and contentious PCNs and, additionally, Fluor’s central arguments on entitlement to the 

revenue.  In turn, Chopra questioned how the revenue from these PCNs could continue to be 

included in the revenue, in light of the rejections.  In response, to support of the probability 

determination, the requested documentation for year-end 2018 and the first quarter of 2019 

asserted that the rejections were the Customer’s initial negotiation position.  Chopra accepted 

this, even though this was inconsistent with other facts of which he was aware.   

 



 6 

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

2019, Chopra helped draft 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.”  Chopra should have known this was a 

material misstatement because many PCNs were not “under discussion,” but rather either formally 

rejected or not yet submitted, and that the statement 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, Chopra should have known the disclosure omitted the amount 

of the unapproved PCNs, which was required under GAAP and SEC regulations, specifically ASC 

910-20-50-1, and SEC Regulation S-X Rule 5-02.3(c)(3).  

 

20. As the CAO, Chopra signed the periodic SEC filings during the Relevant Period. 

Chopra also signed management representation letters for each reporting period during the 

Relevant Period, representing that management expected to recover revenue for unapproved 

change orders in Radford’s forecast.  Chopra also signed sub-certifications to Fluor’s CEO and 

CFO, for the Relevant Period, representing that, among other things, the financial information was 

prompted by and based on facts and circumstances which were in evidence in the relevant quarter. 

 

21. The conduct described above resulted in inaccurate books and records in the 

Relevant Period.  Chopra had information that he should have known indicated that the assumed 

rate of recovery for the PCNs revenue was too high.  While engaging in the foregoing, Chopra was 

a cause of Fluor improperly including revenue for Radford unapproved PCNs in the total revenue 

forecast, which kept the project forecast from loss positions that should have been recognized.  As a 

result of the correction of these errors, revenues for Radford were reduced in the Restatement as 

follows:  

 

Reporting Period Restatement Reduction in  

Revenues Recognized 

Restatement Reduction in  

Radford Forecast Revenues  

2017 (annual) $19.3 million $46.7 million 

Q1 2018 10.1  million $65.9 million 

Q2 2018 $9.4 million $62.1 million 

Q3 2018 $11.8 million $66.7 million 

Q4 2018 $14.0 million $115.2 million 

2018 (annual) $45.3 million $115.2 million 

Q1 2019 $9.5 million $123.5 million 

 

Violations 

 

22. As a result of the conduct described above, Chopra was a cause of Fluor’s 

violations of 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 



 7 

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.  

 

23. As a result of the conduct described above, Chopra was a cause of Fluor’s 

violations of 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.   

 

24. As a result of the conduct described above, Chopra was a cause of Fluor’s 

violations of 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.   

 

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), an 

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

 

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

money penalty in the amount of $15,000 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;  

 



 8 

(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 

Robin K. Chopra 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 

the Fair Fund created in In the Matter of Fluor Corporation, AP File No. 3-21610.  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. 

 

V. 

It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section 

523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by 

Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other 

amounts due by Respondent under this Order or any other judgment, order, consent order, decree  

 

 

 

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


 9 

 

or settlement agreement entered in connection with this proceeding, is a debt for the violation by 

Respondent of the federal securities laws or any regulation or order issued under such laws, as set 

forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19). 

 

 By the Commission. 

 

 

Vanessa A. Countryman 

Secretary