On November 25, 2019, Calumet Specialty Products Partners, L.P. (“Calumet”) agreed to pay the SEC a $250,000 fine stemming from material misstatements the Company made regarding its 2017 financial results.
In September 2017, Calumet disclosed that its internal control over financial reporting (“ICFR”) was ineffective due to the implementation of a new enterprise resource planning system. Consequently, Calumet was unable to file its third quarter 2017 financial results on time. Calumet’s ICFR weaknesses, including a previously unidentified weakness uncovered by the Company’s auditor, continued through March 2018. Nevertheless, Calumet announced its full year 2017 financial results on March 8, 2019. Eleven days later, Calumet disclosed that its actual 2017 financial results would differ from the March 8 earnings release.
According to the SEC, Calumet’s 10-K confirmed that the March 8 earnings release materially overstated the Company’s 2017 financial results and was a direct result of the aforementioned ICFR weaknesses. As a result of the material misstatements, the SEC alleged that Calumet’s March 8 earnings release violated Section 13(a) of the Exchange Act as well as certain rules promulgated thereunder.
Here is a link to the SEC Order.
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