SEC Charges 3 Austal USA Execs with Accounting Fraud, page-24

Criminal charges is hardly “old” news though. Nobody in the ASIC case was indicted on criminal charges and faces jail time. And the fact that one of these employees remained on the Austal USA payroll right up until Saturday really does baffle, especially when Paddy Gregg has been banging on about having increased compliance procedures since Perciavalle “resigned” and given we now know DOJ, NCIS and SEC have been inside the company investigating this since 2019. It is pretty clear from the ASIC settlement that the company accepts things went awry so I can’t see the three persons charged coming out of this cleanly.

Re the company: clause N (108) of the full complaint as reproduced above covers what Austal must contemplate if the individuals are found to be guilty.

i.e. “AUSA and Austal, through Defendants, engaged in a deceptive scheme to artificially reduce the LCS EACs in order to report more revenue to investors for the periods at issue. As a result, AUSA and Austal violated Section 10(b) of the Exchange Act and Rules 10b- 5(a) and (c) thereunder.”

There will be penalties for the violation and a green light for class actions imo.

ASB continues to disappoint. I’ve tried to be fair minded up to this point, but the sagas never end here. The latest cockup in pricing that saw guidance slashed was probably my limit.