Business

Beazer settles federal probe

Beazer Homes, once a major Charlotte-area homebuilder, said Wednesday it settled one of several federal investigations admitting no wrongdoing and paying no fine.

The Atlanta firm said the settlement concluded an investigation by the Securities and Exchange Commission into matters its audit committee had previously reviewed.

In April 2007, the company hired attorneys and forensic accountants to investigate operations in its mortgage unit. That followed an Observer series that found the company arranged loans some buyers couldn't afford and violated federal lending rules. The series also prompted a federal criminal investigation, which remains ongoing.

The company later acknowledged employees in its mortgage business violated federal housing regulations. In February, Beazer closed the business unit.

During its internal investigation, the company also found accounting and financial reporting errors that led it to restate several years of earnings.

On Wednesday, Beazer said in a news release that it “consented, without admitting or denying any wrongdoing, to a cease and desist order requiring future compliance with certain provisions of the federal securities laws and regulations.” The company also said the SEC “considered both remediation efforts…and cooperation” in its acceptance of a settlement.

The agency does not discuss investigations, and an order concerning Beazer was not immediately available on its Web site on Wednesday. There is usually a lag of several days in posting orders, but companies often reveal results upon receipt.

The company could not be reached for further comment.

The SEC's inquiry began on an informal basis in May 2007, two days after the Observer reported several local customers said the company paid for their answers on a customer-satisfaction survey. Beazer executives were eligible for larger bonuses for high scores.

In July 2007, the company said the SEC upgraded to a formal inquiry.

Beazer said in February it would exit the Charlotte market and others amid the nation's ongoing housing downturn.

Related stories from Charlotte Observer

  Comments