SEC Fine for Accounting Violations at Zoltek
Kevin Schott, who is the former CFO of Zoltek has been fined $20,000 (£12,800) by the SEC (Securities and Exchange Commission).
The fine has been announced due to charges against Schott for a series of accounting violations.
The SEC has claimed that Schott had taken control of the internal auditing practice of Zoltek and made two payments totaling to $250,000 to an outside financing consultant.
The outside financing consultant has been identified at having raised funds previously for Zoltek. This action has been reportedly found to be against the specific instructions by Zoltek’s CEO not to do so.
Schott was found to have given instructions to the controller of Zoltek’s foreign subsidiary based in Hungary on two occasions. The instruction was to wire the payments from the subsidiary’s account to the financing consultant. Schott said that the payments were for a different purpose.
Schott gave a false document to Zoltek’s CEO which concealed the payment. This resulted in false entries being made into the accounting books of the company.
SEC also claimed that Schott had made misleading representations in his certifications before the public as well as to Zoltek’s external auditor in 2007 and 2008.