Roadrunner Transportation Systems, Inc. has settled with the SEC over charges for engaging in a multi-year accounting fraud scheme. According to the SEC, Roadrunner manipulated its financial books from at least July 2013 to January 2017 to hit prior earnings guidance and analyst projections.

The SEC also found that Roadrunner hid incurred expenses by deferring and spreading them improperly over multiple quarters to minimize their impact on the company’s net earnings. It also avoided writing down assets that were worthless or receivables that were uncollectable. 

By manipulating earnout liabilities in relation to the company’s acquisitions, the company also created an income “cushion” that could be used to offset future expenses.

Antifraud violations

Roadrunner has, according to the SEC’s order, violated the antifraud, reporting, books and records, and internal accounting controls provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Roadrunner has, without admitting or denying the findings, agreed to cease and desist from committing or causing any future violations of these provisions. The company has also agreed to pay disgorgement of $7,096,092 and prejudgment interest of $2,539,820, which are deemed satisfied by the settlement payment that Roadrunner made in an earlier case in January 2017.