SEC Charges Former Hertz CEO

On August 13, 2020, the Securities and Exchange Commission (“SEC”) charged former Hertz Rental Car CEO and Chairman Mark Frissora with aiding and abetting Hertz in its filing of inaccurate financial statements and disclosures.  While Hertz previously paid $16 million in fines in 2018 to settle SEC charges stemming from this same conduct, the SEC’s complaint against Frissora specifically alleged that “as Hertz’s financial results fell short of its forecasts throughout 2013, Frissora pressured subordinates to ‘find money,’ principally by re-analyzing reserve accounts, causing Hertz’s staff to make accounting changes that rendered the company’s financial reports materially inaccurate.”  The SEC also alleged that Frissora’s conduct caused Hertz to “hold rental cars in its fleet for longer periods and thus lower its depreciation expenses, without properly disclosing the change,” which ultimately forced Hertz to revise and restate its financial statements in 2014 and 2015.  The SEC additionally noted that Frissora has agreed to settle these charges by repaying Hertz nearly $2 million in incentive-based compensation.