St. Joe Company Announces Settlement Of SEC Investigation

(RTTNews) - St. Joe Company (JOE) said that it has fully resolved the previously disclosed investigation by the Securities and Exchange Commission.

As per the settlement, the Company, without admitting or denying any factual allegations, consented to the SEC's issuance of an administrative order. The Company previously established a reserve for potential settlement costs relating to this SEC investigation which will not require an adjustment in the third quarter of 2015, although the Company expects to incur additional legal fees during the third and fourth quarter relating to the completion of this SEC investigation.

The Securities and Exchange Commission charged The St. Joe Company, a Watersound, Florida-based real estate developer and landowner, its former top executives, and two former accounting department directors, with improperly accounting for the declining value of its residential real estate developments during the financial crisis. As a result of this misconduct, St. Joe reported materially overstated earnings and assets in 2009 and 2010.

According to the SEC's order instituting settled administrative and cease-and-desist proceedings, St. Joe, through its former CEO William Britton Greene, former CFO William S. McCalmont, former Chief Accounting Officer Janna Connolly, and former Directors of Accounting Brian Salter and Phillip Jones, repeatedly failed to properly apply generally accepted accounting practices in testing St. Joe's real estate developments for impairment, resulting in the failure to take required write-downs on properties hit hard by the financial crisis.

St. Joe agreed to pay a $2.75 million civil penalty to settle the SEC's charges and Greene agreed to pay a $120,000 penalty and disgorge ill-gotten gains of $400,000 plus prejudgment interest. McCalmont agreed to pay a $120,000 penalty and disgorge $180,000 plus prejudgment interest. Connolly agreed to pay a $70,000 penalty and disgorge $60,000 plus prejudgment interest, and Salter agreed to pay a $25,000 penalty. McCalmont, Connolly, Salter, and Jones each further agreed to be suspended from appearing or practicing before the SEC as an accountant, with the right to apply for reinstatement after two years (in the case of McCalmont and Jones), and after three years (in the case of Connolly and Salter).