SEC Charges Transportation Company Executives With Accounting Fraud

The Securities and Exchange Commission today charged the former CFO and two former employees of a publicly traded transportation company with fraud for manipulating the company’s financial results in order to meet earnings targets and projections. The SEC alleges that Peter Armbruster, the former CFO of Roadrunner Transportation Systems Inc., hid incurred expenses by improperly deferring and spreading them across multiple quarters to minimize their impact on Roadrunner’s net earnings. Armbruster then allegedly manipulated certain reductions to liabilities, creating an income “cushion” that could be accessed in future quarters to offset expenses. The SEC further alleges that Armbruster as well as Bret Naggs and Mark Wogsland, former controllers of Roadrunner’s Truckload segment, identified and failed to write-off millions of dollars in overvalued assets and overstated receivables at one of Roadrunner’s operating companies.