SEC Charges 3 Austal USA Execs with Accounting Fraud, page-2

After reading below regarding imputed knowledge, I expect we’ll see a class action emerge here shortly, if not initiated in Australia then quite likely by US-based ASB shareholders.

From p22 of the Complaint:

H. Due to Defendants’ Deceptive Conduct, Austal Made False Filings, Press Releases, and Investor Presentations.

> 83. Defendants and AUSA reported their financials to Austal. Austal reported its financials on Austal’s website, in press releases, and in public filings made in Australia on the ASX...


From p34 of the Complaint:

N. Defendants Aided and Abetted Violations of Section 10(b).1. AUSA and Austal Violated Section 10(b) and Rule 10b-5(a) and (c) of the Exchange Act and Defendants Aided and Abetted AUSA’s and Austal’s Violations.

>108. 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.

>109. Based on their titles and job functions, Defendants’ knowledge is imputed to AUSA and Austal.

>110. As described above, AUSA and Austal used instrumentalities of interstate commerce in connection with the purchase or sale of Austal’s securities.

>111. As detailed above, AUSA and Austal through the actions, knowledge, and conduct of Defendants used devices, schemes or artifices to defraud in connection with the purchase or sale of Austal’s securities and acted knowingly or with severe recklessness.

>112. As detailed above, Defendants aided and abetted these violations by AUSA and Austal by knowingly (or with severe recklessness) providing substantial assistance to thoseviolations. Among other things, Defendants conducted the EAC manipulation that led to fraudulent revenue recognition and false financial statements....