Without admitting guilt, Westport-based Terex Corp. paid $8 million to settle a Securities and Exchange Commission lawsuit over alleged fraudulent transactions with Greenwich-based United Rentals Inc.
The SEC stated fraud occurred through United Rental”™s sales of used Terex construction equipment to a financing company and its lease-back of that equipment for a short period. As part of the scheme, the SEC added, Terex agreed to sell the equipment at the end of the lease period and guarantee the financing company against any losses. United Rentals separately guaranteed Terex against losses it might incur under the guarantee it had extended to the financing company.
The SEC also alleged that from 2000 through 2004, Terex”™s accounting staff offset inter-company imbalances with unsupported and improper entries, making Terex appear to be more profitable than it was.
In a statement, Terex said the settlement resolves any liability of Terex, but does not do so for current or former employees who may face separate suits.
SEC readies Pequot case
The SEC intends to file civil charges against Westport-based Pequot Capital Management Inc., according to multiple reports citing a Pequot letter to investors.
The SEC has been investigating whether the company traded shares of Microsoft Corp. in 2001 while acting on inside information. In the letter, Pequot stated the charges lack merit.
Amaranth to settle
The defunct Greenwich hedge fund Amaranth Advisors agreed to pay $7.5 million to settle market manipulation charges brought by the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission. Amaranth lost $6.6 billion in 2006 after a trader guessed incorrectly the future spreads on natural gas prices.
