Monday September 10, 4:58 pm Eastern Time
SEC says Swisher Intl inflated earnings in 1996
(UPDATE: adds detail throughout)
WASHINGTON, Sept 10 (Reuters) - Commercial hygiene service provider Swisher International and its chief executive settled accounting fraud allegations by the Securities and Exchange Commission, the regulator said on Monday.
CEO and company founder Patrick Swisher, 46, and the company have settled the case without admitting or denying the allegations, the complaint said. Swisher has also agreed to pay back $391,627, including fines and interest.
The SEC alleged that Swisher overstated earnings for the quarter ended July 31, 1996, by recording a $450,000 franchise sale which had not yet been completed, the agency said in the complaint.
Days before the company filed its quarterly report, the firm's accountants were directed to record the Lone Star LLC franchise sale as revenue from ``other income,'' allowing the firm to report a quarterly net income of $163,886 instead of a loss of $120,131, the regulator said.
Lone Star is a hygiene unit based in Houston.
CEO Swisher also failed to disclosure during the company's 1996 audit that he owned 51 percent of Lone Star, the SEC said, and had directed the sales department to have his name taken off the sale documents.
SEC regulations require that any related third-party transactions, which could cause conflicts of interest, be disclosed.
Calls to the company's attorney were not immediately returned. Swisher is a Nevada corporation headquartered in Charlotte, North Carolina.
Three other Swisher officers were also named in a separate administrative proceeding, the regulator said. The three men agreed to the settlement without admitting or denying guilt, the SEC said.
Swisher stock last traded at 56 cents on the Pink Sheets.
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