Gentex announces settlement with SEC

As previously disclosed, Gentex has been responding to an investigation by the staff of the Division of Enforcement of the SEC regarding certain accounting determinations that could have impacted the company’s reported earnings per share for certain prior quarterly periods. On February 7, 2023, the SEC announced that it has accepted an Offer of Settlement submitted by the company and its current CFO Kevin Nash. Under the settlement, without admitting or denying the SEC’s findings in this matter, the company and Nash have consented to the entry of an administrative civil cease-and-desist order by the SEC with respect to certain violations of the federal securities laws in the third quarter of 2015 through the second quarter of 2018. The company has agreed to pay a civil monetary penalty of $4M, which was fully accrued by the company in the second and third quarters of 2022. Nash has agreed to pay a civil monetary penalty of $75,000. The Order states that, during the Relevant Period, the company had deficiencies in its accounting for its employee bonus compensation programs, and failed to maintain accurate books and records and sufficient internal accounting controls, in violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 13a-11, 13a-13, 13a-15, and 12b-20 thereunder. The Order further states that, during the Relevant Period and while serving as Chief Accounting Officer, Nash did not sufficiently document the bases for certain accounting entries, in violation of Section 13(b)(5) of the Exchange Act and Rule 13b2-1 thereunder, and causing the company’s violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), and Rules 13a-11, 13a-13, 13a-15, and 12b-20 thereunder.