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ARTICLE · 16 OCTOBER 2020

SEC Targets Issuers And Officers For Disclosure Violations Through Data Analytics

Foley Hoag LLP
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Just before the close of its fiscal year, the Securities and Exchange Commission (SEC) brought three noteworthy financial reporting cases against issuers that ...

United StatesCorporate/Commercial Law
John Hancock
John Hancock
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Just before the close of its fiscal year, the Securities and Exchange Commission (SEC) brought three noteworthy financial reporting cases against issuers that resulted from the agency's increasingly sophisticated use of risk-based data analytics to detect disclosure violations.  On September 28, 2020, the SEC filed settled actions against two issuers, as well as two officers of one of them, for falsifying their reported earnings per share (EPS).  These actions, against Interface Inc., an Atlanta-based carpet manufacturing company and its former chief financial and chief accounting officers, and Fulton Financial Corporation, a Pennsylvania-based financial services company, are the first to stem from the SEC Division of Enforcement's EPS Initiative, which harnesses data analytics to uncover misleading earnings management and related misconduct. 

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