Healthcare services company settles SEC charges
A company that provides services to healthcare facilities will pay $6 million to settle charges of accounting and disclosure violations that enabled it to report earnings per share that met research analysts’ consensus estimates for multiple quarters, the U.S. Securities and Exchange Commission said Tuesday.
Bensalem Township, Pennsylvania-based Healthcare Services Group Inc. said in a statement it is “pleased to put this matter behind us.”
The SEC said in a statement that in 2014 and 2015 the company, which provides housekeeping, dining and other services to healthcare facilities, failed to disclose issues related to private litigation against it, as required by U.S. Generally Accepted Accounting Principles, which enabled it to meet, or come close to meeting, analysts’ estimates.
According to the SEC statement, Healthcare Services Group’s former CFO, John C. Shea, failed to direct the recording or disclosure of the related loss contingencies on a timely basis and its controller, Derya D. Warner, made other accounting entries that were not supported by adequate documentation as required by company policies.
The company was charged with violating federal securities law. It has neither admitted nor denied the SEC’s charges. Mr. Shea, who agreed to pay a $50,000 penalty, will become the company’s chief administrative officer effective Sept 1, according to Healthcare Services Group’s statement.