PROVIDENCE – In a crushing blow to corporate accountability, Evoqua Water Technologies Corp. (EVOQUA), a Pennsylvania company with a division in Rhode Island, has agreed to pay an $8.5 million criminal penalty for securities fraud.
According to the U.S. Attorney’s Office, EVOQUA deceived investors by falsely claiming it had earned revenue between late 2016 and 2018. The company’s Aquatics and Disinfection Division improperly recognized revenue in violation of Generally Accepted Accounting Principles, causing EVOQUA to misstate financial statements in its initial public stock offering and subsequent annual and quarterly filings with the SEC.
Under the terms of the non-prosecution agreement (NPA), EVOQUA accepts responsibility for the actions of its employees and admits to facts sufficient to prove securities fraud. The company will also be subject to monitoring, reporting, and compliance obligations for two years.
United States Attorney Zachary A. Cunha slammed EVOQUA’s actions, saying, “EVOQUA deceived investors by claiming it had earned revenue when it had not. As the agreed-upon Statement of Facts makes clear, the Government’s investigation identified serious misconduct for which our agreement holds the company accountable.”
Jodi Cohen, Special Agent in Charge of the FBI Boston Division, echoed Cunha’s sentiments, stating, “Today’s settlement should make it clear to companies that we are watching to make sure they are accurately reporting their revenue so investors can make a fair assessment of their stock values.”
EVOQUA’s $8.5 million penalty is part of a broader settlement that includes an $8.5 million civil penalty to the U.S. Securities and Exchange Commission (SEC) and $16.65 million paid to settle shareholder class-action claims based on the same course of conduct.
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Key Facts
- State: Rhode Island
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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