FMC Technologies Inc. agreed Thursday to pay a $2.5 million penalty to settle charges by the Security and Exchange Commission that it overstated profits in one of its businesses so it could meet internal financial targets. The SEC said that Jeffrey Favret, controller of the technology solutions company's energy infrastructure unit, and a business unit controller Steven Croft, artificially reduced the value of a liability for employee time off, after being pressured to improve the financial performance of that business. That overstated profits by $800,000, which helped the business meet the internal target for the first quarter of 2013. "Companies must accurately report their financial performance without regard to internal targets," said Deputy Director Stephanie Avakian of the SEC's division of enforcement. "Favret and Croft manipulated results to create the impression that the business was performing better than reality." As part of the settlement, Favret and Croft consented without admitting or denying the findings. In addition to the penalty paid, Favret will pay $30,000 and Croft will pay $10,000. The stock, which surged 5% in afternoon trade, has rallied 14% year to date while the S&P 500 has gained 4.8%.
Continue Reading Below
Copyright © 2016 MarketWatch, Inc.