TOPLINE
Former Hertz CEO Mark Frissora on Thursday was accused of supporting and limiting the company in its submission of inaccurate financial statements in 2013, the Securities and Exchange Commission announced Thursday.
Former Hertz Chairman and CEO Mark Frissora poses with a Toyota Prius hybrid car on Thursday June … [+]
KEY FACTS
According to the SEC, in 2013, Frissora pressured subordinates to ‘find money’ by re-analyzing reserve accounts when results fell short, causing them to make changes to financial reports.
The agency also accuses Frissora of failing to tell investors properly that Hertz kept cars for longer periods to reduce write-off costs.
Bloomberg reported earlier this year that Hertz cars ran as long as 50,000 miles, beyond the industry standard of 30,000, and that Frissora wanted to place older cars with the company’s budget brands Dollar, Thrifty and Firefly.
Frissora has agreed to reimburse Hertz nearly $ 2 million in incentive-based compensation and pay a $ 200,000 fine to settle the charges without acknowledging or denying the allegations.
The company itself was already charged by the SEC last year for the alleged scheme, and agreed to pay $ 16 million to settle the charges.
Last year, Hertz sued Frissora and two other former executives in a bid to recover $ 70 million in incentive and divorce payments from them.
After leaving Hertz under pressure from activist investors in 2014, Frissora served as CEO of Caesar’s Entertainment and resigned in 2019.
Hertz did not immediately respond to a request for comment Forbes.
Key background
Hertz filed for bankruptcy protection in May for Chapter 11, saying the coronavirus pandemic has taken its toll on its business. Days after the submission, legendary investor Carl Icahn, who owned the majority of Hertz’s shares, sold his 39% stake in the company at a loss of $ 2 million. Hertz says it intends to stay in business.
