(HedgeCo.Net) The Securities and Exchange Commission today announced that the parent company of United Airlines has agreed to pay $2.4 million to settle charges in a case where shareholders wound up footing the bill so a public official could get more convenient flights.<\/p>\n
According to the SEC\u2019s order instituted today, United reinstated a nonstop flight between Newark, N.J., and Columbia, S.C., at the behest of David Samson, the then-chairman of the Port Authority of New York and New Jersey who sought a more direct route to his home in South Carolina. The route previously experienced poor financial performance and was canceled by Continental Airlines prior to its merger with United, and a preliminary financial analysis conducted after Samson began privately advocating for the route\u2019s return revealed it would likely lose money again.<\/p>\n
Nevertheless, the SEC\u2019s order finds that United officials feared Samson\u2019s influence could jeopardize United\u2019s business interests before the Port Authority, including the approval of a hangar project to help the airline at Newark\u2019s airport. The company ultimately decided to initiate the route despite the poor financial projections. The same day that United\u2019s then-CEO approved initiation of the route, the Port Authority\u2019s board approved the lease agreement related to the hangar project. United employees were told \u201cno proactive communications\u201d about the new route.<\/p>\n
According to the SEC\u2019s order, United circumvented its standard process for initiating new routes, and no corporate record at United accurately and fairly reflected the authorization to approve the money-losing flight route from Newark to Columbia. The route ultimately lost approximately $945,000 before it ceased again roughly around the time of Samson\u2019s resignation from the Port Authority.<\/p>\n
\u201cUnited disregarded the books and records and internal accounting controls provisions of the securities laws while casting aside its normal decision process to re-enter one of its hub\u2019s poorest performing markets,\u201d said Andrew Ceresney, Director of the SEC\u2019s Division of Enforcement.<\/p>\n
Andrew M. Calamari, Director of the SEC\u2019s New York Regional Office, added, \u201cUnited initiated a money-losing flight solely to curry favor with a public official, and failed to reflect in its books and records a fair and accurate depiction of the rationale behind the decision and its projected financial impact.\u201d<\/p>\n
Samson has pleaded guilty to bribery in a criminal case announced in July by the U.S. Attorney\u2019s Office in New Jersey. United entered into a non-prosecution agreement with the U.S. Attorney and paid $2.25 million.<\/p>\n","protected":false},"excerpt":{"rendered":"
(HedgeCo.Net) The Securities and Exchange Commission today announced that the parent company of United Airlines has agreed to pay $2.4 million to settle charges in a case where shareholders wound up footing the bill so a public official could get […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-55520","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/55520","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=55520"}],"version-history":[{"count":1,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/55520\/revisions"}],"predecessor-version":[{"id":55521,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/55520\/revisions\/55521"}],"wp:attachment":[{"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=55520"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=55520"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=55520"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}