© Stocksak. The Mattel company logo is seen at the Montoi plant’s entrance in Escobedo, Mexico, March 15, 2022. REUTERS/Daniel Becerril
By Chris Prentice
WASHINGTON (Stocksak), -California’s Toymaker Mattel Inc (NASDAQ: ) has agreed to pay $3.5 Million to settle U.S. Securities and Exchange Commission(SEC) charges over financial misconduct in 2017, the agency announced on Friday.
According to the SEC, Mattel, which makes Barbies and Fisher-Price toys incorrectly reported its losses in the third and fourth quarters 2017 due to tax reporting mistakes. The issue was not rectified until November 2019, and the lack of internal controls for financial reporting was not disclosed. The error was not reported to the chief executive officer of the company and the audit committee.
Mattel spokesperson said that the company was happy to have the matter over. The firm did not deny or admit to the findings of the SEC. Mattel shares fell 1% in extended trading on Friday.
The SEC said it is separately initiating litigation against a former audit partner at PricewaterhouseCoopers LLP to determine whether he engaged in improper professional conduct and violated auditor independence rules.
The SEC claimed that Joshua Abrahams, auditor, failed to verify that the $109 million error, which was uncorrected, was documented. He also failed to maintain auditor independence by giving advice to Mattel’s chief financial officer regarding who should be appointed to a top position in the company.
Both Abrahams counsel and a spokesperson for PWC declined to comment.