Monday, December 31, 2007
The SEC filed a complaint against Joseph F. Apuzzo, former Chief Financial Officer ("CFO") of Terex Corporation, for aiding and abetting securities law violations of United Rentals, Inc. ("URI") and Michael J. Nolan ("Nolan"), a former CFO of URI. Apuzzo is the second CFO charged in connection with the alleged violations. On December 12, 2007, the Commission filed settled financial fraud charges against Nolan.
The SEC alleges that Apuzzo aided and abetted a fraudulent accounting scheme involving two sale-leaseback transactions, carried out between 2000 and 2002 by URI, Nolan and others. The transactions were structured to improve URI's 2000 and 2001 financial results by allowing URI to recognize revenue prematurely and to inflate the profit generated from the sales. The complaint alleges that Apuzzo signed agreements with URI that he knew, or was reckless in not knowing, were designed to hide URI's continuing risks and financial obligations relating to the sale-leaseback transactions and approved the issuance of inflated invoices that he knew, or was reckless in not knowing, URI, through Nolan and others, would use to inflate URI's gain on the transactions. As a result, URI materially overstated its financial results in its Forms 10-K for fiscal years 2000 and 2001, as well as in other filings and public releases.