Cahill Gord
on & Reindel partners David Kelley [left] and David Januszewski in New York represented Atlanta-based Beazer Homes USA Inc. in reaching a settlement with the U.S. Securities and Exchange Commission on a probe of possible accounting irregularities and questionable management of its mortgage business.
As part of the settlement, Beazer will not pay a fine and did not admit wrongdoing. The SEC said on Wednesday that its investigation is continuing. The prosecution was handled by lawyers in the SEC Atlanta office, led by attorney Kit Addleman.
"We have reached this resolution with the company, but we'll continue to look at the conduct of others, including individuals that may have been employed" by Beazer, Addleman said.
According to SEC documents, the agency found that the homebuilder Beazer misstated net income and engaged in fraudulent earnings management practices by decreasing its reported net income by improperly increasing certain reported operating expenses and by other means. Beazer consented to a cease-and-desist order
that requires “future compliance with certain provisions” of federal laws and regulations, the company said in a news release.
Beazer said in a regulatory filing that it’s still being investigated by the U.S. Attorney for the Western District of North Carolina and by other unnamed state and federal agencies for the same alleged accounting irregularities.
According to the Cahill web site, Kelley is a former U.S. Attorney for the Southern District of New York. As co-chairman of the Justice Department’s task force on the Sept. 11, 2001 terrorist attacks, Kelley personally prosecuted “American Taliban” suspect John Walker Lindh.