The Securities and Exchange Commission recently announced a settlement with Oregon-based freight transportation supply company, The Greenbrier Companies Inc., and founder and former CEO and Chairman, William A. Furman, for (i) failing to disclose perks provided to Furman and certain other Greenbrier executives, and (ii) failing to disclose compensation Furman received from Greenbrier’s use and charter of Furman’s private plane for travel by company executives and Furman.
The SEC found that Furman owned a private plane, which he leased to an aircraft management company to charter to third parties on his behalf. During fiscal years 2017 to 2021, Greenbrier paid the management company approximately $3 million to charter Furman’s plane for business-related travel, but Greenbrier did not disclose that Furman received approximately $1.6 million of that amount. The SEC also found that Greenbrier failed to disclose approximately $320,000 in perks provided to Furman and Greenbrier executives mostly for travel related expenses.
Public companies are required to disclose executives’ financial interest in company transactions and to accurately record executives’ perks. By failing to adequately disclose executives’ financial interest in various transactions, the SEC concluded that Greenbrier and Furman violated negligence-based antifraud and proxy provisions of the federal securities laws, and that the company had insufficient internal accounting controls. Greenbrier and Furman agreed to pay civil penalties. See the orders here and here.