Future USCGC Pickering (Image: Austal USA)
“Three current and former former executives of a shipbuilder that constructs vessels for the U.S. Navy have been indicted on accounting fraud charges accusing them of falsely inflating the company’s reported earnings, federal prosecutors said.”
Austal also has the second phase contract to build Offshore Patrol Cutters. Their alleged actions, which were reputedly intended to mislead shareholders and investors, even if proven, don’t necessarily affect the shipbuilder’s pricing or product, but the report goes on to note,
The U.S. Securities and Exchange Commission said in a news release that the three “engaged in a scheme to artificially reduce the cost estimates to complete certain shipbuilding projects for the U.S. Navy by tens of millions of dollars.”
Could they mislead shareholders and investors without also falsifying publicly available contract information?