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Former director of Hertz is charged with aiding and abetting accounting fraud



TOPLINE

Former Hertz CEO Mark Frissora was charged on Thursday with aiding and abetting the company in filing incorrect accounts in 2013, the Securities and Exchange Commission said Thursday.

KEY FACTS

According to the SEC, in 2013, Frissora pressured subordinates to “find money” by analyzing reserve accounts when results were short, prompting them to make changes to financial reports.

The agency also accuses Frissora of failing to disclose to investors correctly that Hertz kept cars for extended periods in order to cut depreciation costs.

Bloomberg reported earlier this year that Hertz kept cars around for as long as 50,000 miles, well past the industry norm of 30,000, and that Frissora wanted to place older vehicles with the company’s budget brands Dollar, Thrifty and Firefly.

Frissora has agreed to repay nearly $ 2 million in incentive-based compensation and pay a $ 200,000 fine to settle the plaintiffs without admitting or denying the allegations.

The company itself was already sued by the SEC last year for the alleged scheme and agreed to pay $ 16 million to settle the fees.

Last year, Hertz sued Frissora and two other former executives in an attempt to repay $ 70 million in incentives and severance pay from them.

After leaving Hertz in 2014 under pressure from activist investors, Frissora served as CEO of Caesar’s Entertainment and retired in 2019.

Hertz did not immediately respond to a request for comment Forbes.

Key background

Hertz filed Chapter 11 bankruptcy protection in May, saying the coronavirus pandemic has exhausted its business. Days after filing, legendary investor Carl Icahn, who owned the majority of Hertz’s shares, sold his entire 39% stake in the company at a loss of $ 2 million. Hertz says it intends to stay in business.


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