SEC Charges 3 Austal USA Execs with Accounting Fraud

News overnight from the US. This is quite serious and is not a good look for Austal while competing for AUKUS work (or in relation to the award of that Coast Guard contract either, which Eastern said it was contesting):

https://www.sec.gov/news/press-release/2023-69

SEC Charges Three Executives at U.S. Navy Shipbuilder Austal USA with Accounting Fraud

“The Securities and Exchange Commission today charged three executives of Mobile, Alabama-based shipbuilder, Austal USA LLC, for orchestrating a fraudulent revenue recognition scheme that allowed its parent company to meet or exceed analyst expectations. The SEC alleges that, from at least January 2013 through July 2016, Austal USA’s former president, Craig D. Perciavalle, its current director of financial analysis, Joseph A. Runkel, and former director of the Littoral Combat Ships program, William O. Adams, 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...

...The complaint further alleges that Austal USA’s parent company, Australia-based Austal Limited, prematurely recognized revenue and, as a result, met or exceeded analyst consensus estimates for earnings before interest and tax (EBIT), a key financial metric for the company...”


Court filed complaint in full (PDF) here:
https://www.sec.gov/litigation/complaints/2023/comp-pr2023-69.pdf

I expect ASB will need to issue a statement pre-market open on Monday regarding this new development.

Gee, we just can’t seem to catch a break here