Ex-Beazer Homes CFO O'Leary to return $1.4 bonus

The Charlotte ObserverAugust 31, 2011 

Another former executive at Beazer Homes USA Inc. is returning the money he made from his bonus and stock while his company was committing accounting fraud, the Securities and Exchange Commission said Tuesday.

Former chief financial officer James O'Leary agreed to reimburse the Atlanta homebuilder more than $1.4 million he received after Beazer filed fraudulent financial statements in fiscal year 2006.

According to an SEC filing in federal court, O'Leary, who served as CFO from 2003 to 2007, was not charged with any misconduct but had not returned the pay as required under the Sarbanes-Oxley corporate governance law.

The settlement announced Tuesday comes almost six months after chief executive officer Ian McCarthy, who was ousted from the company in June, agreed to return $6.5 million in bonus and stock-based pay. The SEC has previously brought enforcement actions against Beazer and its former chief accounting officer, who engineered a scheme to inflate the company's earnings, the SEC's complaint said.

Those actions and other investigations followed a 2007 Observer series that found that Beazer, then a major Charlotte-area homebuilder, arranged larger loans than some customers could afford and violated federal lending rules.

Beazer officials could not be reached for comment Tuesday.

Without admitting or denying the SEC's allegations, O'Leary agreed to reimburse Beazer more than $1.4 million in cash, the SEC said. That includes the executive's $1.02 million fiscal 2006 bonus, plus $131,733 Beazer paid him for stock he had received as additional compensation that year.

O'Leary will also reimburse the company $274,525 in stock sale profits. The settlement is subject to court approval.

The Sarbanes-Oxley Act requires reimbursement by certain senior corporate executives of any bonus, other incentive pay and stock profits received during a time when a company was not in compliance with financial reporting requirements because of misconduct. That can be applied against someone who has not been personally charged with misconduct or alleged to have violated federal securities laws.

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