LOS ANGELES Northwest Pipe Co. has turned the page on one of its most difficult chapters with the end of both a U.S. Securities and Exchange Commission (SEC) probe and related shareholder lawsuits arising out of accounting troubles that began more than three years ago.
Northwest Pipe has been informed by the SEC that it has completed an investigation into the companys accounting practices and that the agencys staff does "not intend to recommend any enforcement actions against the company," Robin Gantt, vice president and chief financial officer of the Vancouver, Wash.-based producer of water transmission pipe and tubular products, disclosed this week.
Moreover, Gantt said during a quarterly earnings conference call that a shareholder class-action lawsuit and shareholder derivative action filed against the company as a result of its earlier accounting troubles were "settled and dismissed" at the end of March.
Last year, Richard Roman, Northwest Pipes former president and chief executive officer, said the company had reached a tentative settlement on the shareholder actions (amm.com, Aug. 9, 2012). While he didnt reveal the amount of the settlement, SEC documents indicated the various settlements totaled $13.25 million, subject to court approval. Northwest Pipes insurers were expected to pay virtually the entire amount, with the exception of $400,000.
Northwest Pipes accounting issues first came to light in November 2009 (amm.com, Nov. 15, 2009) when the company revealed that it expected to lose about $1 million in the third quarter of that year, would be late filing its financial results for that period and was conducting an "ongoing internal investigation of certain accounting matters," among them "certain revenue recognition practices."
The first class-action lawsuit, which alleged the company and its top executives violated U.S. securities laws by "making false or misleading statements," was filed later that month (amm.com, Nov. 24, 2009). In 2010, Northwest Pipe disclosed the SEC probe in documents filed with the agency.
While Northwest Pipe resumed reporting financial results in November 2010 (amm.com, Nov. 21, 2010), problems continued to crop up, resulting in subsequent delays (amm.com, March 20, 2012).