On Wednesday, it was announced that the former chief financial officer for Bankrate Inc. had been charged in an indictment for his alleged involvement in a complex accounting and securities fraud scheme. 52-year-old Edward J. DiMaria of Fairfield County, Connecticut served as the chief financial officer for the public traded financial services and marketing company. The defendant previously worked at the company’s offices in New York City.
The indictment alleges that from 2011 to 2014 DiMaria and his co-conspirators carried out a scheme to manipulate Bankrate’s financial statements and to artificially inflate the company’s earnings. The defendant and his con-conspirators are accused of engaging in so-called “cookie jar” or “cushion” accounting in which millions of dollars in unsupported expense accruals were left on the company’s book and then reversed in later quarters to ensure the company met earnings goals.
The defendant is also accused of misrepresenting certain company expenses as “deal costs” to artificially inflate publicly reported adjusted earnings metrics. DiMaria is accused of making materially false statements to hide his behavior from auditors, shareholders and the investing public. The indictment also alleges that while the defendant was misleading Bankrate’s auditors and the public about the company’s financial condition, he was selling his own shares of Bankrate’s stock for a profit.
At this point in time, the defendant remains innocent until proven guilty beyond a reasonable doubt in a court of law. Additional details can be found here.