The Securities and Exchange Commission Tuesday announced a settlement with The St. Joe Co. and its former top executives on charges of using improper accounting procedures when the real estate development company was headquartered in Jacksonville.
St. Joe moved its headquarters to WaterSound in the Florida Panhandle in 2010, but the SEC said in a news release the company overstated its earnings for 2009 and 2010 by “improperly accounting for the declining value of its residential real estate developments during the financial crisis.”
Several former St. Joe executives, including CEO Britt Greene and Chief Financial Officer William McCalmont, without admitting or denying the findings, consented to the SEC’s order “which found that they violated or caused the violation of, among other provisions, the negligence-based antifraud provisions, as well as reporting, books-and-records, and internal controls provisions, of the federal securities laws,” the SEC said.
“Where specialized accounting rules govern, it is essential that those responsible for the company’s accounting and financial reporting be familiar with and properly apply them,” said Andrew Ceresney, director of the SEC’s Enforcement Division, in the news release.
“St. Joe and its senior executives failed to do so here, and thereby deprived investors of critical information with which to make informed investment decisions,” he said.
As part of the settlement, St. Joe agreed to pay a $2.75 million civil penalty and Greene agreed to pay a $120,000 penalty and give up $400,000 in “ill-gotten gains,” the SEC said.
McCalmont agreed to pay a $120,000 penalty and give up $180,000 in gains.
St. Joe had disclosed in January that the SEC had found violations in an investigation that began in 2011.
St. Joe said in a news release Tuesday that all the actions took place prior to a sweeping reorganization in 2011 that replaced the CEO, CFO and board of directors.
“The company cooperated with the SEC investigation and believes this settlement is in the best interests of the company,” St. Joe said.