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The U.S. Securities & Exchange Commission (SEC) has announced that Ocwen Financial Corporation will pay $2 million to resolve charges that connected to what the regulatory agency defined as “misstated financial results [created] by using a flawed, undisclosed methodology to value complex mortgage assets.” The SEC charged that Ocwen misstated its net income for the last three quarters of 2013 and the first quarter of 2014.
“Ocwen’s filings led investors to believe the company was valuing complex mortgage assets using Generally Accepted Accounting Principles rather than relying on a related company’s accounting methodology that later proved to be flawed,” said Michael J. Osnato, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit. “Ocwen released inaccurate financial statements because its internal controls were inadequate and its audit committee failed to scrutinize whether the methodology was an appropriate way to measure fair value.”
The settlement did not require Ocwen to make any public admission of guilt, and no individual executive was charged by the SEC in connection to these charges.