Atlanta-Based Pest Control Company, Former CFO Charged with Improper Earnings Management

The Securities and Exchange Commission today announced that Rollins Inc. agreed to pay $8 million to settle charges that it engaged in improper accounting practices in order to boost its publicly-reported quarterly earnings per share (EPS) to meet research analysts’ consensus estimates. The SEC’s order finds that, in the first quarter of 2016 and the second quarter of 2017, Rollins, a nationwide provider of pest control services, made unsupported reductions to their accounting reserves in amounts sufficient to allow the company to round up reported EPS to the next penny. According to the order, the company’s then CFO, Paul Edward Northen, directed the improper accounting adjustments without conducting an analysis of the appropriate accounting criteria under generally accepted accounting principles (GAAP) and without adequately memorializing the basis for those accounting entries.