The Securities and Exchange Commission has filed civil charges against three former executives of Swisher Hygiene, the latest fallout from investigations into the Charlotte-based cleaning company’s accounting practices.
Michael Kipp, Swisher’s former chief financial officer, and Joanne Viard, Swisher’s former director of external reporting, face multiple charges of violating securities laws for alleged accounting manipulations designed to meet profit targets, the SEC said Tuesday.
A third former executive, John Pierrard, who was Swisher’s director of financial planning, settled SEC claims filed against him by agreeing not to violate securities laws in the future or to serve as an officer or director of a company that issues securities. The SEC did not impose a civil penalty on Pierrard in return for his cooperation in the investigation, according to court filings.
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In October, the U.S. Attorney’s Office in Charlotte announced that Pierrard, of Delray Beach, Fla., had agreed to plead guilty to his role in Swisher’s scheme to manipulate its books and inflate reported earnings. Later that month, a grand jury indicted Kipp, of Charlotte, and Viard, of Santa Rosa Beach, Fla., on securities fraud and obstruction of justice charges.
In a deferred prosecution agreement announced in October, the company itself accepted responsibility for the conduct of its former employees and agreed to a $2 million penalty.
Kipp and Viard have pleaded not guilty in the criminal case, according to court records. A sentencing date has not been set for Pierrard.
Brian Cromwell, a Parker Poe attorney representing Pierrard, declined to comment because of the ongoing criminal case. Cromwell said it can be assumed that his client is cooperating in the criminal case because of his cooperation in the SEC case.
An attorney for Viard declined to comment and an attorney for Kipp could not immediately be reached.
Swisher, a provider of janitorial and cleaning-supply services, has been dogged by allegations of financial wrongdoing since 2012, when the fast-growing company said that it was conducting an internal investigation of its accounting practices after a former employee raised concerns. Swisher’s stock plunged and investors filed suit.
According to the SEC complaint, Kipp, taking advantage of Swisher’s weak internal controls, “directed his accounting group to aggressively reevaluate and manipulate various acquisition-related reserves and expenses” to meet predetermined earnings targets. Viard, according to the complaint, “identified potential acquisition-related entries that could be reclassified to meet earnings targets.”
At the direction of Kipp, Pierrard manipulated Swisher’s allowance for doubtful accounts, “knowing or consciously disregarding” that the actions were not in accordance with proper accounting practices, according to the complaint. Staff researcher Maria David contributed.